Markets
Why are cryptocurrency markets crashing? Will Bitcoin (BTC) price go back to $60,000?
Cryptocurrency markets are facing extreme bearish heat, causing a nearly 4% drop in global market capitalization. In addition, trading volume has also dropped heavily, indicating a decline in trading activity. One of the main reasons could have been the Mt. Gox distribution, with an influx of over 50,000 BTC in circulation. However, initially, lenders seemed to be holding the token, but the increasing selling volume indicates different sentiments.
Now that the redemption phase has just begun, will the BTC price reach $60,000 by the end?
While the price of Bitcoin is falling, ETFs have seen a positive inflow, with $485 million recorded as the highest. Hence, it is believed that the possibility of a bullish rebound continues to hover over the cryptocurrencies, regardless of the growing bearish heat. The price of BTC in the short term seems to have made a retracement and hence may be preparing for a small rebound.
THE BTC Price was moving inside a rising wedge; hence, a nominal pullback was expected. With the current bearish action, sellers are expected to get squeezed, which could lead to an extended downtrend for a while. The levels at $63,550 can be considered important since the trend reversed after touching this zone. Therefore, bulls jumped in when the levels fell below $63,500 and since the RSI triggered a bullish divergence, a bounce seems to be imminent.
On the contrary, the possibility of forming another lower high looms as the RSI remains above the lower level. This could cause the price to break the temporary support and in that case, the 100-day and 200-day MA at $62,743 and $61,743 could act as a strong support. However, if the bulls fail to hold these support levels, Bitcoin price is expected to drop below $60,000 to test the monthly lows around $59,200 in an extreme bearish case.
Therefore, the next few days could prove to be very important for the price of Bitcoin (BTC), as they could determine the next course of action for the token.