Bitcoin could plunge back to $20K
• BTC/USD falls on Silvergate
• Hawkish Powell has hurt everything include cryptos
• Not much support in sight below 21.4K
Bitcoin was down for the third day and week at the time of writing, pressing against key support around $21400. The momentum and negative sentiment towards the sector strongly suggest a breakdown could be on the cards towards 20K next.
Sentiment towards crypt assets have been negative and that hasn’t changed after Powell ramped up the Fed’s hawkish rhetoric earlier this week. The dollar and bond yields have risen sharply, weighing on all non-interest-bearing assets, including cryptos and gold.
Crypto prices have also fallen after Silvergate, a bank that has been at the centre of the industry’s growth, decided to shut down. More on this and what it means for Coinbase is something my colleague Joshua Warner has written about, below.
But first, let’s take a look at the chart of BTC/USD.
If support gives way around $21400, there is not much prior reference points for the buyers to use as an area of interest. So, we could see a sharp follow-up technical sell-off in the event of a breakdown.
Should the bearish scenario play out, 20K could be the obvious target, while the 200-day average comes in about $300 below that level around 19.7K.
The bulls will either want to see a false breakdown below that 21.4K level, which would point to the bears getting trapped, or an eventual move above one of its local highs to create a higher high and thus break the downtrend. The most recent high comes in around $22,655. This is therefore the line in the sand for the bears, meaning that for as long as price holds below this level, the bears would remain in control.
As mentioned, here is some ore crypto-related news from my colleague Josh Warner, who earlier wrote the following:
-- Written by Fawad Razaqzada, Market Analyst with FOREX.com
Follow Fawad on Twitter @Trader_F_R
• Hawkish Powell has hurt everything include cryptos
• Not much support in sight below 21.4K
Bitcoin was down for the third day and week at the time of writing, pressing against key support around $21400. The momentum and negative sentiment towards the sector strongly suggest a breakdown could be on the cards towards 20K next.
Sentiment towards crypt assets have been negative and that hasn’t changed after Powell ramped up the Fed’s hawkish rhetoric earlier this week. The dollar and bond yields have risen sharply, weighing on all non-interest-bearing assets, including cryptos and gold.
Crypto prices have also fallen after Silvergate, a bank that has been at the centre of the industry’s growth, decided to shut down. More on this and what it means for Coinbase is something my colleague Joshua Warner has written about, below.
But first, let’s take a look at the chart of BTC/USD.
If support gives way around $21400, there is not much prior reference points for the buyers to use as an area of interest. So, we could see a sharp follow-up technical sell-off in the event of a breakdown.
Should the bearish scenario play out, 20K could be the obvious target, while the 200-day average comes in about $300 below that level around 19.7K.
The bulls will either want to see a false breakdown below that 21.4K level, which would point to the bears getting trapped, or an eventual move above one of its local highs to create a higher high and thus break the downtrend. The most recent high comes in around $22,655. This is therefore the line in the sand for the bears, meaning that for as long as price holds below this level, the bears would remain in control.
As mentioned, here is some ore crypto-related news from my colleague Josh Warner, who earlier wrote the following:
- Silvergate is down over 50% and poised to open at fresh all-time lows this morning after revealing it plans to wind down its operations and enter voluntary liquidation. ‘In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of bank operations and a voluntary liquidation of the Bank is the best path forward. The bank’s wind down and liquidation plan includes full repayment of all deposits. The company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets,’ said Silvergate in a statement. That is having a contagion effect on other crypto-related stocks, with Riot Platforms down 3.7% and MicroStrategy trading 2.9% lower.
- Coinbase is also feeling the heat from the Silvergate fallout and is down 3.7% today. The company cut ties with Silvergate, which was a banking partner for Pro clients, last week and the cryptocurrency trading platform said today in a tweet that it has ‘no client or corporate cash at Silvergate’, adding that ‘client funds continue to be safe, accessible and available’.
-- Written by Fawad Razaqzada, Market Analyst with FOREX.com
Follow Fawad on Twitter @Trader_F_R
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