Bitcoin Slumps Below Key Support Level. How Low Can It Get?

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Bitcoin has pulled out of a crucial area of ​​support that served as the upper limit of the negative move near the 18,000 range in late June.

Bitcoin Breaks Crucial Level

After falling below the bear flag in mid-August, prices were able to fall further after a pause of 20,000 before reaching a crucial support area around 19,600. While it has just bounced back into action, since 2017 this level has also served as a critical source of resistance for the leading cryptocurrency.

BTC/USD falls below $20k. Source: TradingView

This puts strong downward pressure on Bitcoin as it moves in September. Moreover, according to cryptocurrency expert Ali MartinezBitcoin’s market share has fallen below 39% for the first time since 2018.

For Bitcoin maximalists, this is disturbing news as alternative cryptocurrencies continue to overtake the cryptocurrency monarch.

Popular cryptocurrency analysts have also drawn attention to a worrying trend in Bitcoin’s performance in September.

For example, according to an expert, Bitcoin has experienced a losing month end in nine of the past 12 September. On September 7, Glassnode reported that 19.29 million BTC addresses had losses.

bitcoin

Source: Glassnode

When BTC/USD hit an all-time high of $19,666 on December 17, 2017, it reached its all-time high. Since then, a breach of this zone in December 2020 has sparked a rebound that has sent the major cryptocurrency soar before hitting a new all-time high of $69,000 in November last year.

Selling pressures have pushed prices below their late June low of $18,595, after falling below previous support that had turned into resistance.

Price may continue to crash

In the event that prices fall further, a psychological breakthrough of $18,000 could trigger a retest of the $17,792 level, representing the 78.6% retracement of the move from 2020 to 2021, with the low December 2020 of $17,569 as the next level of support.

The four-hour chart shows how these historic levels have created confluence zones that keep both bulls and bears at bay as the short-term price movement hovers between $18,500 and $19,000. Retests of $19,666 and the subsequent resistance low of $20,418 are likely on the upside as the price moves above $19,000 and $19,500.

In a recent report, the Glassnode also mentioned a possible negative market move of Bitcoin. It claimed that about 12.589 million BTC, or more than 65.77% of the total amount of BTC in circulation, has been inactive for at least a year.

Source: Glassnode

In the past, “Bitcoin bear markets” were characterized by growing inactive supply. This magnifies the pain felt by maximalists who have patiently waited for a price breakout.

Short-term volatility was predicted by BaroVirtual, a CryptoQuant-based author. The analyst studied the trend pattern of Net Unrealized Earnings (NUP), which shows short-term periods of volatility.

Featured image from Shutterstock, charts from Glassnode and TradingView.com

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