The price of Bitcoin (BTC) fell to $8,900 today, May 21, after a strong rejection of the $9,800 level. The community claims that the collapse to $9,200 could trigger a new downward trend.
Almost all indicators point to a correction
In the short term, traders generally expect a correction in the Bitcoin market. Almost all macro indicators and oscillators point to an imminent correction.
When the Bitcoin price initially fell below $9,200, it fell below a key Bollinger Band line, which often marks a turning point. If an asset maintains an upward trend, it is usually expected to recover to the middle Bollinger Band line.
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But in Bitcoin’s case, it fell directly through it and dropped to $8,900 in quick succession. As such, it risks a fall to the bottom of the Bollinger Band, in the $8,000 area.
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According to Bitcoin trader Jonny Moe, Bitcoin’s price risks falling below another trend line that brings it back to the one it had before March 12.
Since the second week of March, the Bitcoin price has risen incredibly from $3,600 to more than $10,000. After failing to regain support from $9,800 to $9,900, the BTC is now vulnerable to a deep drop below the up channel.
If the Bitcoin price closes below $9,000, Moe said the $6,500 to $7,300 range is likely to be the next support for Bitcoin.
TraderXO for its part predicted a drop to $7,700 last week and said that Bitcoin Trader – Bitcoin Era – Bitcoin Billionaire – Bitcoin Code – The News Spy – Immediate Edge – Bitcoin Evolution – Bitcoin Revolution – Bitcoin Profit – Bitcoin Circuit is showing a typical „false ladder“ that is at risk of taking a quick correction to below $8,000.
Traders feel pessimistic
There are two main reasons that cause many of the major traders in the market to feel pessimistic: the lack of support between $7,700 and $9,000 and the upside potential of the BTC above $10,500.
Bitcoin saw only a minor decline when it went from $7,700 to $10,000. While it shows the strength of momentum it had at that time, it also leaves it vulnerable to a significant drop.
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The lack of resistance above $10,500 is also considered a factor preventing the BTC from exceeding $10,000.
While there is little resistance above $10,500 at important levels such as $12,500 to $14,000, there is a strong restriction above $10,000 to $10,500.
In April, hedge fund manager Mark Dow said Bitcoin faces massive resistance, even when the BTC price was at $6,000.
The confluence of strong resistance in the $10,000-$10,500 range and the lack of support between $7,700 and $9,000 increases the likelihood that the BTC price will fall to the $7,000 level.