ISLAMABAD: Second worst week of Bitcoin is ending today (Sunday) which could be considered as a worst-ever week for the leading cryptocurrency if measured in dollars.
Two weeks ago on May 10, the price of the said cryptocurrency was trading at around $60,000. However, the chronic devaluation of Bitcoin this week lies slightly above $30,000. The data is shared by Bitstamp according to which a 50% reduction in the value was recorded on April 14.
The severe drop in Bitcoin’s price occurred on Wednesday when it slipped beneath the significant support of the January 2021 highs of around $42,000. In few hours, Bitcoin plunged to as low as $30,000.
However, the bulls regrouped from this crash quickly to allow the daily candle to close at support around $36,750, provided by a .786 Fib Retracement, and just a day after BTC was retesting $42K as resistance.
Earlier on Sunday, Bitcoin’s price dropped to 7% due to which its price dropped down to as low as $33,820 (as of now). It has since bounced slightly as the bulls attempt to defend short-term support at $35,300 (downside 1.414 Fib Extension) but, with the current bearish momentum within the market, it is likely for this support to break.
Currently, Bitcoin is trading inside a steep descending price channel as can be seen on the following chart. The cryptocurrency attempted the upper limit of this price channel during the weekend. However, the buyers could not overcome resistance at around $41,350 (bearish .382 Fib), together with January’s previous all-time high of $42K. It caused the market to continue the stark downtrend.
Key Support Levels: $33,520, $32,465, $30,000, $28,650, $27,745.
Key Resistance Levels: $36,750, $38,000, $40,000, $41,350, $42,055.
The first level of strong support beneath $35,300 lies at $33,520 (Friday lows) which is followed by support at $32,465, $30,000, $28,650, and $27,745 (Jan 2021 lows).
On the other hand, the first big resistance lies at $36,750 which is followed by $38,000, $40,000. The resistance at $36,750 is the critical 200 day moving average line, $41,350 (bearish .382 Fib), and $42,055 (Jan 2021 highs).
The daily RSI had dipped into tremendously hyped terms and conditions as the bearish momentum which is its lowest value since March 2020 because of Covid-19. It has since bounced slightly higher as the bearish push eased up marginally. Yet the sellers are in complete control here in the short term. It is a need to wait for a higher low on the RSI to act as the first signal that the bears are set to stop their descending pressure.