Bitcoin Price Forecast: Bearish showdown plunges BTC to $35,000, but recovery seems imminent

By John Isige
May 20, 2021 Updated May 20, 2021
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Bitcoin bears continued with the display of muscle strength on Wednesday, leading to losses under $40,000. The bellwether cryptocurrency plummeted to $35,000 before some semblance of stability returned to the market.

The losses were not unique to Bitcoin but affected most crypto assets. Over $500 billion was wiped off the cryptocurrency market led by altcoins such as Ethereum, Dogecoin, Binance Coin Polkadot, and Bitcoin Cash.

Bitcoin’s short-term outlook flips bullish

At the time of writing, Bitcoin trades marginally above $39,300. This price action follows a commendable recovery from $35,000. Bulls currently target trading above $40,000 and perhaps settling past $42,000.

The short-term technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) have vivid bullish signals. The former has ricocheted from the oversold areas and is heading fast toward the midline. This shows that buying activities dominate, with investors betting on recovery extending to higher levels.

The MACD also has a bullish impulse, reinforced by support established at -2,500. Moreover, this indicator follows an asset’s trend and measures its momentum. The MACD line (blue) crossing above the signal line will cement the bull’s presence in the market. Similarly, movement above the mean line (blue) would catapult Bitcoin toward $50,000 as the bullish camp solidifies the momentum.

BTC/USD four-hour chart

BTC/USD price chart
BTC/USD price chart by Tradingview

Although recovery is underway, Bitcoin needs to confirm a break above $40,000. Most investors remain skeptical of the recovery, afraid to end up in a bull trap. Price action past $42,000 will ensure that attention shifts from seeking support to gaining traction toward $50,000.

Bitcoin intraday levels

Spot rate: $39,300

Trend: Bullish

Volatility: Expanding

Support: $38,000 and $35,000

Resistance: $42,000 and $46,000

John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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