Bitcoin holds above $20k – Can it Maintain Resistance the Level?
The crypto markets saw no reprieve Tuesday, with Bitcoin exhibiting only minor indications of recovery. The biggest cryptocurrency is presently trading for just more above $21,000, down 5% in the last couple of days.
Other big cryptocurrencies have failed to reclaim ground lost in Monday’s sell-off, with Ethereum falling another 7% since this time yesterday. The value of the second-largest cryptocurrency is presently about $1,130. Following the previous day’s pounding, stocks were calmer, with the S& P 500, Dow Jones Industrial Average, and NASDAQ all nearly flat.
The big event that investors are looking for is the US Federal Reserve’s next interest rate hike on Friday. Goldman Sachs (GS) economists now predict 75 basis point rate increases in June and July, followed by a 50 basis point increase in September and a 25 basis point increase in November and December. Will the markets be soothed by certainty?
What If It Falls Below $20k?
Recent price movement hasn’t shown anything concerning a likely short-term turnaround. However, a larger picture suggests a framework that may provide hope to the market. Some investors may be thinking if now the time to buy Bitcoin.
Some Technical Analysis
Bitcoin reached a high of $69,000 in November 2021. The price has lost 70% of its worth since then. Although Bitcoin has not fallen below $20,000, the chart implies that solid support is located around $19,500. As a result, Bitcoin will return to its prior all-time high (ATH) reached in December 2017.
After a huge bull run, the crypto market has proven that prices frequently return to past ATHs. That appears to be Bitcoin’s path. But what happens if Bitcoin hits that level of support?
The good news for the market is that Bitcoin has not had a significant pullback after the price fell from the ATH. Retracements are common after huge market movements, and Bitcoin is due for one.
If support remains around $19,500, a reversal is possible. According to Fibonacci retracements, Bitcoin normally retraces to the .702 level. If that occurs, and we take the ATH and immediate support as lows, we expect Bitcoin to retrace to approximately $55,000.
If the retracement occurs, Bitcoin will encounter resistance at .702 and may extend to .786, implying that Bitcoin’s price will challenge resistance at $59,000. The market will eventually turn positive, and investors will look for the top crypto exchanges to trade in cryptocurrency.
Our Recommended Bitcoin Account
Buy, sell, trade and store BTC on the eToro platform
Social trading platform & copy trading
CySEC, ASIC & FCA regulated