Analysts have been predicting a bottom to Bitcoin’s spectacular drop for weeks now, and although several critical support levels were left in the dust during this new phase of THE correction, that elusive bottom has apparently still not been reached. What’s driving this meltdown though, and where is it likely to take BTC and the crypto market as a whole?
At this point, one does not have to be a Bitcoin buff or a technical/fundamental analysis to tell what’s going on. People are selling their cryptos like the world is ending tomorrow, seeking the safety of the greenback, as what had undoubtedly grown into a massive bubble last year due to the hype and the square money drawn in by it, has slowly but surely deflated, one day at a time. The reason we’re saying “slowly” is that this is far from the pop most doom-preachers were painting such vivid pictures of. The current rout bears all the marks of one of BTCs “standard” corrections, one that will take the price down to the level the market (minus the bandwagon speculators) feels is the right one.
So where will it all bottom out this time? As always, that is difficult to tell, as the intrinsic value of BTC (and its crypto peers) is hard to nail down. According to experts, this value is best defined by usage and adoption. In Bitcoin’s case those are a couple of rather controversial issues, as some argue that the currency has failed both as a store of value and a means of payment. There’s currently a great dose of emotional baggage involved in the equation too.
What is technical analysis telling us this time though?
The chart is pretty clear about the gloom and doom that’s currently unfolding.
Support levels are shoved aside and though – as the stochastic oscillator points it out – the asset is massively oversold, and probably well overdue for a trend-reversal – the rout continues unabated.
Once again, the fundamentals weigh too heavily on the price for technical analysis to be useful in any shape or form. Long story short: speculators are jumping ship, and for the moment, there’s nothing that’s likely to stop them from doing so.
As the EUR/USD’s two-day decline shows, many are indeed running for the hills represented by the greenback, although the crypto picture is most probably not enough to move the needle on that one by itself. The fact that the stock market is taking a beating these days too probably accounts for most of the dollar’s recent gains.
As it has become the norm this year, the fundamentals regarding crypto are not looking good at all. Countries that have been bastions of the crypto revolution are restricting access to exchanges and banks all over the world are making moves towards banning crypto-based credit card purchases.
Everything tossed into the middle, the outlook emerging for BTC and its peers is far from a rosy one, with no relief in sight.
Currently sitting at $6,210, BTC is looking to extend its losses below the psychological support level of 6k.
How are the other cryptos faring?
They are feeling the bite of the panic selling as well. Bitcoin Cash is currently flirting with the $800 support level, eying a drop below it, while ETH is it $607, its above 1k days a fast fading, distant memory. LTC’s graph is a steeply downward-heading mess at this point as well.
Has the bottom truly fallen out of the crypto market this time, or will it be found around $6,000 for BTC? More importantly, will all this be followed by a bubble even greater and more aggressive than the last one at some point down the line?