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Research warns that Bitcoin bulls have much to do to preserve newly-won support, but failure could still see a BTC price cascade below $20,000.
Bitcoin (BTC) stayed near key support on March 5 as the weekly candle close brought fresh fears of a breakdown.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Analyst warns over fate of $20,000
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it continued to move in a tight range over the weekend.
The pair had remained practically stationary since its abrupt fall on March 3, triggered by a margin call amid uncertainty over Silvergate Bank.
The streak has been broken pic.twitter.com/TY5w7NAKWw
— Daan Crypto Trades (@DaanCrypto) March 4, 2023
While avoiding further losses, analysis warned that Bitcoin could still easily fall much lower if a nearby support level failed to hold.
Monitoring resource Material Indicators explained that BTC price action had “lost key technical support” and that $22,000 — the sight of a recent resistance/support (R/S) flip — was now all that remained for bulls to hold onto.
“The local R/S Flip zone is the last stand between a retest at the trend line. Meanwhile, Trend Precognition is indicating a downtrend,” it wrote in part of a Twitter update on the day.
“Will see if that changes after the W close.”
Accompanying charts showed the trend line and the BTC/USD order book on Binance at stake, with bid liquidity at $22,000.
BTC/USD charts. Source: Material Indicators/ Twitter
Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, warned that should $21,300 fail to hold as well, $20,000 may not help to stem the exodus.
“Crucial area for #Bitcoin is to hold the $21.3K area. Losing that, and we’ll see another sweep toward $19.5Kish and altcoins dropping 15-25%,” he predicted on March 4.
Van de Poppe nonetheless maintained a more optimistic view overall, suggesting that $40,000 could still appear “in a few months.“
“Moral of the story: Dollar-Cost Average and have balls to buy when you don’t feel confident,” he advised in part of a subsequent post.
“Overwhelmingly bearish sentiment”
With Silvergate’s potential bankruptcy still a hot topic, research firm Santiment queried why the market reaction had been so severe.
Related: Bitcoin price would retest $25K without Silvergate saga — analysis
In a dedicated post on the phenomenon, analysts revealed what they described as an “unusually high amount of negative commentary about the markets.“
“It’s particularly interesting that #cryptocrash has been a key of-and-on trending hashtag on the platform, even though Bitcoin’s mild -5% pullback occurred more than three days ago,” it continued about Twitter user behavior.
“Typically, you can capitalize on this level of negativity on the markets, and this kind of overwhelmingly bearish sentiment can lead to a nice bounce to silence the critics.“
Twitter data chart with selected crypto terms. Source: Santiment
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