Key Insights
- Amid scares of Bitcoin crashing to $25,000, some experts predict Bitcoin will reach $50,000 at the very least by April 2024.
- The 50-day moving average is all that holds Bitcoin up from a drop straight down to $25,000
- A break above the 20-day moving average might prove to be the saving grace for a rally to $30,000.
- Some traders have begun to sell their coins at a loss because of Bitcoin’s 9% dip last week.
The prices of several cryptocurrencies in the market have been unpredictable lately, owing to Bitcoin dragging the rest of the market down with it after its slump from $31,000.
Bitcoin, in particular, hasn’t been very strong in terms of price action as a possible drop from $27,300 to the $25,000 zone looms.
At the end of the day, it might help to be aware of the flagship cryptocurrency’s every move and to be sure of how far it can fall if it does fall, or how far up it can go if the bulls step up against the bears.
In this article, we examine what investors can expect Bitcoin to do over the coming weeks, and what to expect from its price movements.
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And without further ado, let’s jump right in.
Bitcoin’s Behaviour So Far
Although Bitcoin has so far managed to stay above $27,000, its price movement around this level doesn’t appear very encouraging. This is without mentioning the staggering 9% loss over the past week, which gave the market’s participants a fresh dose of anxiety as to where the cryptocurrency may be headed next.
Data from Glassnode reveals that since April 16, short-term holders of Bitcoin who bought it fewer than 155 days ago have been exchanging their coins at a loss (more of that in a later section)
At the same time, while short-term traders are beginning to worry and put protective measures in place to cushion a potential price drop below $25,000, some experts retain positive attitudes and predict Bitcoin will reach $50,000 at the very least by April 2024.
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Meanwhile…
Bitcoin’s 50-Day Moving Average is now in Focus
Bitcoin’s decline over the last week has now brought attention to its 50-day moving average, which is currently at $27,041.
As illustrated above, the 50-day moving average (purple line) is all that holds Bitcoin up from a drop straight down to $25,000.
A break below the 50-day SMA in Alex Kuptsikevich, senior market analyst at FxPro’s opinion, would in his words, “call into question the bull market’s strength”, or do serious damage to the positive sentiment on Bitcoin.
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Kuptsikevich also mentioned that A consolidation below $26,600 may signal the beginning of a more severe downturn.
From Kuptsikevich’s opinion on the matter, it is easy to conclude that a drop to $25,000 wouldn’t just stop there. It might also serve as the gateway for an even steeper drop to $20,000.
A Break Above the 20-day Moving Average May Be The Saving Grace
The chart below shows how Bitcoin has spent the last several days fluctuating between its 20-day (red) and 50-day (purple) moving averages.
This suggests indecision between the bulls and bears, and that the bulls may be trying to buy Bitcoin’s dips to the 50-day SMA ($27,041) while the bears are keeping the cryptocurrency from crossing its 20-day SMA ($28,931).
A break below the %0-day moving average becomes ever possible as the days roll by, owing to how the 20-day moving average appears to be trending down, and the RSI already shows Bitcoin in bear territory.
Conversely, if by some turn of events, Bitcoin reverses and starts to trend upwards, a break above the 20-day moving average might prove to be its saving grace.
This would mean that the bulls have taken control again, and are ready to push Bitcoin upwards to a retest of the $30,000 zone.
Bitcoin Traders May Be Panicking Amid $25,000 Scares
It goes without saying that the recent Bitcoin price movement alarmed a lot of investors in the market.
According to data from the on-chain analytics company Glassnode, coins bought at later dates (less than 155 days ago) were massively being sent to exchanges at a loss over the last week.
The data indicates that these coins have been increasingly moved to exchanges to be sold at a lower price than they were purchased, starting about April 16.
This indicates that the traders who owned these currencies were prepared to sell them at a loss amid the scares of Bitcoin falling to $25,000 or lower.
Another analytics firm, Santiment has also noted in a tweet, that loss transactions increased as markets declined, due to traders FOMO’ing on Bitcoin above $30k and Ethereum above $2k this past week.
📉 With many traders #FOMO'ing in #Bitcoin above $30k and #Ethereum above $2k this past week, loss transactions have mounted as markets pulled back. Since Thursday, traders are moving coins below prices they obtained them at 3 times as often as above. https://t.co/6Coh9qurWk pic.twitter.com/2UsqszC6jm
— Santiment (@santimentfeed) April 22, 2023
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
