- Bitcoin saw a sharp 7% price drop today as the cryptocurrency rolls over from above $59,000 to hit the current $54,750 support.
- The coin had pushed higher above the 20-days EMA last week but found resistance at a falling trend line over the weekend.
- The latest drop lower has now pushed Bitcoin beneath the 50-days EMA.
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|Key BTC resistance levels||$55,600, $58,000, $60,000, $51,192, $62,500|
|Key BTC support levels||$46,745, $53,260, $51,777, $50,000, $49,665|
*Price at the time of writing
Bitcoin took a steep 7% price plummet today as it drops into the $54,750 support provided by a short-term .382 Fibonacci Retracement level. The coin had been trading above $59,600 yesterday but failed to overcome resistance at a falling trend line from the April ATH price and started to roll over.
Today’s price decline saw Bitcoin falling beneath the 50-days EMA support as it drops below the average price over the past 50-days.
Bitcoin has been seeing a lackluster performance over the past four weeks as it remains stuck inside a wide range between the ATH price near $65,000 and the support at $47,000 (long-term .5 Fib Retracement). This is a vast range, but a drop beneath the April lows at $47,000 might start to shift the sentiment into a bearish trajectory.
Despite the substantial gains in Bitcoin as it produces returns in 2021 that outstrip all legacy assets, some continue to issue warnings against the cryptocurrency. The Bank of England Governor Andrew Bailey warned people to lose all their money if they invest in Bitcoin. Bailey stated that Bitcoin had no intrinsic value, and buyers should be cautious when buying any digital currency.
On the other side of the equation, prominent on-chain analyst Willy Woo believes that we won’t be entering a bearish market anytime soon. Recently, the analyst provided evidence that the accumulation by long-term ‘strong’ holders is genuinely unprecedented and only short-term holders seem to be unloading their positions:
The purple line tracks coins moving between weak and strong hands.
Woo continued to state the the coins moving to corporate treasuries are likely making a strong impact on the long-term HODLer positions. He also pointed out that Grayscale Trust now owns 3.5% of all Bitcoin and only produces inflows of BTC into cold storage.
Lastly, Woo also stated that the growth of the leveraged trading market has also helped the on-chain statistics to remain stable as leveraged traders require fewer coins to move to open and close their positions.
Taking the optimism further, Mark Zuckerberg, CEO of Facebook, recently showed his position towards Bitcoin, which is very promising. On Facebook, Zuckerberg introduced the world to his two goats – named Max and Bitcoin:
Mark Zuckerberg named his goat “Bitcoin” pic.twitter.com/msWSgHKCaZ
— Documenting Bitcoin ? (@DocumentingBTC) May 10, 2021
This is great news due to the fact that Zucks is a wealthy billionaire who might be loading up on Bitcoin positions. Furthermore, it could also be a suggestion that Facebook, a company with over $20 billion cash on their books, might be looking to enter into Bitcoin as a hedge against inflation – like previous companies such as Tesla.
Bitcoin remains the cryptocurrency godfather as it currently holds a market cap value of around $1.03 trillion.
Let us take a quick look at the markets and see where we might be heading.
Bitcoin Price Analysis
What has been going on?
Taking a look at the daily chart above, we can see how the .5 Fib Retracement support at $47,000 bolstered the market toward the end of April and allowed the coin to rebound. The 100-days EMA there also played its part in helping the market to reverse.
By the end of April, Bitcoin was already trading at around $58,000, but this proved to be a solid resistance level in the first few days of May as the cryptocurrency failed to break above it.
Over the weekend, Bitcoin finally managed to push above $58,000 to reach as high as $59,600. However, a falling resistance trend line halted the market, and the bulls struggled to break above it. As a result, Bitcoin rolled over from there yesterday as it spikes as low as $53,900 – breaking beneath the 20-days EMA.
Today, Bitcoin continued lower as it slipped beneath the 50-days EMA until support was found at $54,745 – provided by a short-term .382 Fib Retracement. The buyers are now battling to hold this support.
Bitcoin price short-term prediction: Neutral/Bullish
Although Bitcoin remains bullish over the long term, it is now considered neutral in the short term. A break beneath the April lows at $47,000 is likely to turn Bitcoin bearish. On the other side, a break above $60,000 would help to turn Bitcoin bullish again in the short term.
If the sellers push beneath the current support at $54,745 (.382 Fib Retracement), the first level of support lies at $53,260 (.5 Fib Retracement). This is followed by $51,777 (.618 Fib Retracement), $51,235 (100-days EMA), $50,000, and $49,665 (.786 Fib Retracement).
Additional support lies at $47,000 (long term .5 Fib Retracement), $45,843 (downside 1.414 Fib Extension), and $44,720.
Where Is The Resistance Toward The Upside?
On the other side, the first resistance lies at $55,600 (50-days EMA). This is followed by $58,000, the falling trend line, and $60,000.
Beyond $60,000, resistance is located at $51,192, $62,500, $64,000, and at the ATH price near $65,000.
If the buyers continue to break the ATH, additional resistance lies at $66,120 (1.272 Fib Extension), $67,500, $68,745, and $70,000.
Where Are The Technical Indicators Showing?
The RSI has now dropped back beneath the midline. Additionally, the Stochastic RSI has produced a bearish crossover signal. Both of these indicators are suggesting Bitcoin might see an extended drop back toward $50,000.
Keep up-to-date with the latest Bitcoin Price Predictions here.
Previous BTC analysis
At CoinCodex, we regularly publish price analysis articles focused on the top cryptocurrencies. Here’s 3 of our most recent articles about the price of Bitcoin:
- Bitcoin Dominance Analysis – BTC Dominance Trading In Long Term Ascending Triangle – Is Altseason 2.0 Being Pushed Further Back? (Bullish)
- Bitcoin Meets Resistance At $57,270 But Remains Inside Ascending Price Channel – Will The 50-Days EMA Hold? (Bullish)
- Bitcoin Sees Recovery After Finding Support At 100-days EMA – Will It Head Back Above $60,000 This Week? (Neutral)