Massacre is happening in the cryptocurrency space. Bitcoin has gone over the cliff edge and dropped to $54,000. And it likely isn’t done yet. The key support at $51,000 awaits below. Could BTC fall even further than this?
Is a 30% Full Correction Coming?
It’s been a dismal week for Bitcoin and the cryptocurrency market. The cryptocurrency Alpha has dropped nearly 15%, equating to a loss of about $9,300. This also marks a 27% reversal from those heady days at the $73,800 peak. If Bitcoin continues to find major support at $51,000, this would constitute a full 30% correction.
So, what are the chances of Bitcoin dropping to this $51,000 level? Indicators would suggest they are quite significant. The price of BTC is currently hanging by a thread at minor support around $54,600, but it has already dipped below this and earlier on Friday reached $53,250.
The Lowest Cryptocurrency Sentiment in the Last 12 Months
Source: Alternative (Fear and Greed Index)
Sentiment for cryptocurrency has plummeted sharply over the past month, according to the Fear and Greed Index. From a greed indication and a score of 75 last month, the index now shows Fear, with a score of 29, marking its lowest reading in the past 12 months.
Approaching $51,000 – Could the Price Drop Further to $43,000?
Source: TradingView
The weekly chart for the price of $BTC is starting to look quite bleak. It appears that the M-top pattern (a highly bearish structure) is in play. With continued selling pressure from long-term holders, governments like those of the US and Germany, etc., it seems that the $BTC price may drop to $51,000. However, it should be noted that $51,500 aligns perfectly with the Fibonacci 0.382, so a bounce from here could actually be quite bullish.
However, the question must be posed: “Will it stop there?” If this support doesn’t hold, then $43,000 is the next significant level, with possibly some support beforehand around $48,000 to $46,000. This would be quite devastating for Bitcoin, and we must wonder if the price could recover from such a correction and return to all-time highs and beyond. Why Bitcoin?
These are moments when investors must question why they made their investments in Bitcoin. The fundamental metrics remain as strong as ever, and as governments continue to print more currency to service their debts, Bitcoin will see increasing demand.
If your investment horizon is for the next 10 years, we can imagine that Bitcoin will be much higher after this period. Certainly, the same cannot be said for fiat currencies. They are all headed towards zero – it just takes some research and math to verify this.
Disclaimer: This article is provided for informational purposes only. It is neither intended nor should be construed as legal, tax, investment, financial, or other advice.