Yesterday, bitcoin's price continued to decline, and in the past 24 hours, it had dropped north of 2%. At the time of this writing, it was trading around $55,400, according to CoinGecko.
Currently, we think the outlook is turning grim for bitcoin, and if buyers don't show up soon, a significant drop might occur.
Additionally, bitcoin's price went below the predicted range (blue), another extremely bearish signal.
Our reasoning is also supported by the Volume Profile Visible Range (VPVR) on the left of the above chart, which shows BTC/BTC is reaching a dangerous zone—below $52,000, where buy orders are scarce.
We now think that if bitcoin's price drops further, a move between $45,000 - $48,000 is possible.
Later in the Daily Roundup, we will discuss investing themes around this extreme bearish case.
Hence, we think investors and traders should take advantage of the ongoing correction and add bitcoin to their portfolios. However, all those thinking of entering a long position should trade with care. Low volumes frequently point to incoming volatility.
We remain bullish on BTC/BTC as long as:
- BTC/BTC remains above its 20-day MMA (red), 50-day MMA (green), and 200-day MMA (blue).
- BTC/BTC doesn't drop below $52,000.
- BTC/BTC daily volume goes above its 21-day Modified Moving Average soon.
What Do Traders Think?
This week's first tweet comes from William Clemente III, a cryptocurrency writer who works for Bitcoin Magazine.
In his post, Clemente discussed the possibility of a significant supply shock in bitcoin. To support his thesis, he described a series of recent large outflows of bitcoin from exchanges:
"14,824 BTC in the last 24 hours; 19,790 BTC in the last week; 71,183 BTC in the last 30 days."
Essentially, the analyst believes that the bitcoin market will soon experience a rapid price rise due to supply being removed and demand increasing (Law of Supply and Demand).
Could this be the case?
The following post comes from Blackbeard, a bitcoin trader.
He shared a chart of how he thinks bitcoin’s price will move in the next few months.
To summarize, Blackbeard believes bitcoin’s price could hit $88,000 sometime in May, and that the price won’t fall below $50,000.
Today, BTC/USD crashed towards $52,900, which could indicate his thesis is on the verge of being invalidated.
However, up until now, bitcoin’s price has found strong support above $52,000, which indicates even if it falls below this target, buyers will flock to the market and scoop bitcoin at the cheap.
Therefore, there’s a chance bitcoin won’t go below $50,000 for the time being. Let’s wait and see if this week bitcoin keeps trading above $52,000, a critical level for the cryptocurrency.
The following tweet comes from Credible Crypto, a trader, investor, and entrepreneur.
Credible Crypto shared a bearish post stating that
“I still lean towards a move down to 38-40k to complete this correction based on everything I am seeing. $BTC.”
Essentially, his reasoning stems from buyers not being able to keep bitcoin’s price above $50,000.
Currently, bitcoin’s price is struggling to remain above $52,000.
If bitcoin’s price has such a significant drop, we will look to take the opportunity to accumulate large amounts of bitcoin and to open a few long contracts as well.
Given the volatility, we think it’s best to let bitcoin’s price finalize its consolidation. Once it makes a sharp move, we’ll take action.
The last post of the day comes from Justin Bennett, a cryptocurrency investor and technical analyst.
In his post, Bennett shared a daily chart of bitcoin's price and added three lines, indicating dangerous zones for BTC/USD.
The first is around $52,200 and the second and third between $43,000 and $42,000.
The reason why Bennett thinks bitcoin's price will drop towards these price regions is that
"$BTC may need to correct to the October channel support near $42,000 - $43,000. A move to this channel support would "reset" the chart for the next leg up, which I believe starts in April."
Even though the trader is quite bearish for the short-term, he also believes that bitcoin could still move towards $100,000 and above.
To conclude, he wrote that
"A move above $62,000 negates this."
Bitcoin Price Prediction
At the time of this writing, bitcoin's price is trading close to $55,200, according to CoinGecko.
Bitcoin's price has declined around 2% since yesterday, and we think we may deteriorate further if buyers don't show up soon. Volume keeps falling, which may indicate a swing is coming. Hence, if the price continues to decline, we'll be forced to update our view, since it may be indicating a further drop toward $52,000 is about to take place.
Adding to that, a significant number of traders are now strongly considering the possibility bitcoin's price will face another correction before picking up the pace again. Some are even considering a price drop towards the mid-$40,000 range. We think this week will play a significant role in the short-term price trend and that towards the end of the week, the direction will become much more apparent.
How do we think the price will trade today? As shown in the above chart, we believe that bitcoin could top a little over $59,000 in the next few days, as long as buyers return to space. Still, it's improbable bitcoin's price suddenly shifts its ongoing correction.
On the other hand, we don't expect the cryptocurrency to drop much below $52,000. If it fails to hold that level, then we think a drop toward $48,000 could play out.
To finalize, the VPVR shows a high number of buy orders between $46,500 and $50,000. It also indicates that there are almost no sellers left above $62,000.