The cryptocurrency industry as a whole is crashing. What is the explanation for this? Tesla- Invested $1.5 billion in Bitcoin in February, launching a Bitcoin rally that was harmed by Tesla’s declaration that it will no longer accept Bitcoin as payment due to environmental concerns about crypto-mining. According to Reuters, China has prohibited its financial institutions and payment firms from providing cryptocurrency-related services. As a result, BTC/USD dropped more than 30% and briefly fell below $30,500. The world’s most valuable cryptocurrency then found support and recovered from its $30,000 low. Bitcoin’s downside potential has remained tilted towards the January crash price of $30,000 after it broke through the crucial $42,000 mark, but it has now recovered. BTC is currently floating around the $40k mark, with the possibility of a resumption of the upward trend if government regulations on crypto are relaxed. Bitcoin has attempted numerous corrections, but a 20% dive to a three-and-a-half-month low is a crash. More panic selling may occur, resulting in a large sell-off.
Key Levels
Resistance Levels: $55,000, $50,000, $45,000
Support Levels: $30,000, $25,000, $20,000
BTC/USD Daily ChartThe selloff in global crypto markets intensified further as BTC scored the largest single-day point drop in history to $30,000 support level after breaching the strong moving average (MA 200) base. Technically, BTC/USD powered through key near-term cluster support level at $42,000 cluster support, as well as MA 200 at $40,000. The development suggests that correction from $64,899 through both moving averages (MA 50 & MA 200) is at least one larger degree.
On the other hand, the rebound from $30,000 would probably be a return back into the uptrend from the January 2021 rebound of $29,156 low to February 21 high of $58,367. If that’s the case, BTC could head to 38.2% retracement of $30,000 to $42,000 at $38,000, which is close to MA 200 (now at $40,000). That’s the point where BTC would get some solid support to form a base for the next surge up.
BTC/USD 4-Hour ChartFrom the 4-hour chart perspective, the scenario implies BTC/USD trading in a bear market beneath short-term moving average (MA 50 and MA 200). Bitcoin has dropped below the psychological $40,000 support mark and is now trading at its lowest level since February of this year at the lowest point of the chart. The BTC/USD pair is expected to fall towards $33,000 before reversing.
The short-term Relative Strength Index is highly oversold and has been on the low. After sellers failed to break the $30,000 support mark, Bitcoin is attempting to recover higher into the $42,000-$43,000 channel. If successful, BTC’s recent crash will be short-lived while the bulls may take the reins back. The BTC/USD pair is only bullish while trading within the $42,000-$48,000 range.
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