Bitcoin (BTC) broke below the $60,000 support in the early hours of today. The level was crucial for the coin as it has held the price seven (7) times since March. Breaking below such strong support could send in some more bearish sentiment into the market.
To address this, Crypto Jebb made a YouTube video, to discuss what is making the price of BTC drop and the potential turning points.
What you'll learn 👉
Why Bitcoin (BTC) Price Is Dropping
Based on the Crypto Jebb’s video, the price of Bitcoin is dropping for three main reasons:
The first is that there have been substantial outflows of Bitcoin ETFs in the last few days, and this has been making the price dip. Another is the concerns over the potential sale of bitcoin from the defunct crypto exchange, which has been contributing to the ongoing market fears. This could also be part of the reason ETFs have been having more outflows than inflows.
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The anticipation of Ethereum ETFs has also been adding to the bearish sentiment. There have been speculations about the potential impact it could have on the Ethereum and general crypto markets. So think that, just like Bitcoin, ETH ETFs going live could bring a temporary price decline. Such speculation is triggering many to exit their positions, making the price of Bitcoin fall.
Bitcoin has been bearish for some weeks with a price drop of more than $12,000, which is a 17% decrease with the possibility of further declines.
Key Support Levels and Potential Points of Reversal
The price of Bitcoin is currently trading at around $58,600, but CryptoJebb shows the price could drop to $52,800. If that fails to hold, it could drop to $49,000. These key levels also serve as the prices that the analyst thinks the price could reverse.
Looking at historical patterns shows that Bitcoin has seen a 40% to 55% reversals, during periods of long rallies. In 2019, it fell by 55% during the COVID-19 pandemic. His analysis also shows that Bitcoin often falls by 40% before swinging up again, noting that the $49,000 he speculated was a 33% price drop.
The analyst expects Bitcoin to rally strongly in the last part of this year and early next year. This could also be supported by the whole market balancing out by then. Instead of panicking, investors can start using the dollar cost average strategy to buy BTC bit by bit.
He believes that holding the crypto for at least 5 years will allow investors to make the most of the potential profit. The analyst also suggests diversifying investments in other assets like stocks and real estate and emphasizing good financial planning, like paying off debt, saving money, and making a budget, for overall financial health.
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