Bitcoin price had been trading within a tight range for a long time, but that range is now being violated. The king cryptocurrency has turned its direction downwards again, and there doesn’t seem to be a clear reason for the drop. The FedNow claims are not realistic, and the news about North Korea had already circulated long before. There is only one option left.
Bitcoin (BTC) Chart Analysis
The only remaining way is to look at what technical analysis tells us. There hasn’t been a significant development on the fundamental side to support the price drop. Earnings reports are not alarmingly bad. However, since the Fed meeting is less than a week away, investors may be panicking. Usually, we see negative movements like this before meetings where an increase is expected.
On the technical front, BTC weakened significantly after being rejected by the 21-day simple moving average (SMA). This SMA, located at $30,400, provided the highest level of the day for Bitcoin, and the market later erased all its intra-day gains. The rejection at this level has now forced the price to move downwards.
How Low Will Bitcoin Fall?
The ongoing drop after a long period of sideways movement indicates that things are getting serious in the world of cryptocurrencies. Popular crypto analyst Poppe said in today’s market assessment that deeper lows will soon become a reality.
“Not being able to break the critical level seems to have triggered a search for lower levels for Bitcoin.”
Another crypto analyst, Daan Crypto Trades, said that volatility could return thanks to the increasing open interest. In another Twitter post regarding the 4-hour 200-period moving average and exponential moving average, Daan said, “Bitcoin finds support at the lower end of the range and the 4H 200MA/EMA.”
“So far, the bounce hasn’t been very convincing yet, and lower timeframes are extremely volatile. In the short term, I continue to find 30,500 dollars to 29,500 dollars interesting.”
Material Indicators suggested that there could be a temporary peak for BTC/USD, highlighting the importance of the 21-day SMA. In a section of the day’s analysis, they said, “The sharp rejection of technical resistance at the 21-day moving average and more trouble accumulating around $31,000 indicates that the peak has been reversed.”
If the downward trend continues, the Bitcoin price could establish a new low between $28,500 and $28,800. For this, we need to see closings below $29,700.
