Bitcoin (BTC) sank past a key support level on Monday, as a cryptocurrency rout intensified. The token’s latest losses appear to be part of a pattern that signals a deeper fall.
BTC dropped over 3% in the last 24 hours, falling below $39,000 and hitting a one-month low. The world’s largest cryptocurrency is facing strong selling pressure on concerns over rising inflation and aggressive monetary policy tightening by the Federal Reserve.
But analysts say while the token could see some relief from selling in the near-term, it is likely to sink further, possibly even below $35,000.
BTC in an impulse wave decline
Crypto analyst @SmartContracter noted that BTC appears to be playing out an impulsive five-wave decline. They still expect the token to see a “decent bounce” this week, with prices reaching as high as $44,000, before tumbling to new lows.
The analyst noted that the token’s latest losses would attract another wave of buyers, which would temporarily boost its prices. But technical indicators broadly showed that BTC was set for more losses.
We got the dump, now comes the swift bounce that gets everyone turbo bullish again around 44k
The token’s bounce is expected to be followed by sharp selling pressure, driving prices to their lowest level in two months.
Where will losses bottom out?
Price action over the past few days had suggested BTC found a new bottom around $40,000. But today’s fall quashes that theory, and has traders searching for the next bottom.
Concerns over rising inflation and a hawkish Fed had pushed BTC prices to as low as $33,000 in January- their lowest for the year. Most traders regard this as a probable bottom for the token.
But BTC’s realized price- a popular indicator of a possible bottom- shows that the token could drop as far as $25,000- its lowest since 2020. Still, popular analyst Plan B says such a scenario is unlikely.
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