After Bitcoin (BTC) plunged below the crucial $20,000 level, the market is focused on the cryptocurrency’s next price movement, with bears and bulls playing a key role.
The general market consensus is that if Bitcoin fails to find support at the $20,000 level, it could lead to a further market crash towards $15,000. On the flip side, if the flagship cryptocurrency makes a rebound above $20,000 it could open room for a new rally.
In the last 24 hours, Bitcoin has slightly gained by about 4%, trading at $20,500. Despite the gains, there are still concerns the asset is not yet out of the woods.
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The latest BTC price drop has resulted in the asset forming a weekly candle close below the 200-week moving average (MA). The last time Bitcoin attained this level was in March 2020, when both the crypto and equities markets were reacting to the economic impact of the pandemic, illustrated in a chart by crypto trading expert Rekt Capital on June 20.
Bitcoin can rally above 200-week MA
According to the analyst, Bitcoin needs to reclaim the 200-week moving average that will act as support for an extended bullish run.
“Bitcoin needs to reclaim the 200-week MA as support to enjoy bullish continuation from $17,500. Otherwise, Bitcoin could form its bottoming out Accumulation Range below the 200-week MA for the first time ever,” said Rekt.
This level has historically acted as a strong level of support. For instance, the lows established during previous bear markets have occurred in the region of 200-MA.
Bitcoin’s next course of action could be determined by how the asset has performed around the 200-MA. While a lower price movement remains possible, history suggests that Bitcoin might not drop too far below for an extended period.
With Bitcoin trading below the 200-MA, the asset has a historical tendency to briefly dip below this level and then embark on an upward trajectory.
Experts take on Bitcoin’s next movement
This is contrary to some input by market experts who believe that Bitcoin might be headed for a further drop.
As reported by Finbold, economist Peter Schiff believes the widespread crypto market sell-off will likely continue until Bitcoin hits zero. He notes that the market is the bubble that was overdue to burst.
Besides the technical analysis, other factors like the state of the economy will define Bitcoin’s next approach. The crypto market meltdown has correlated with the broader market as the Federal Reserve moves to tame high inflation by announcing an interest rate hike while battling the recession fears.
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