Bitcoin was hovering around $20,000 for nearly two months before heading south this week reaching $15,600 levels. BTC pushed itself down to November 2020 lows erasing all profits it generated last year during the bull run. A quick turnaround in price is less likely as bulls appear helpless while the bears have gained a technical advantage.
Crypto analyst Jim Wyckoff attributed Bitcoin’s decline to the FTX crisis that wiped nearly $200 billion from the markets. The FTX crisis and the subsequent crash have eroded investors’ confidence in the crypto markets.
According to Wyckoff, bears are in a position to add more price pressure that could pull Bitcoin down furthermore. “Bears have quickly gained technical power to suggest more downside price pressure in the near term. The marketplace is still buzzing about the turmoil in the cryptocurrency markets on Tuesday that spilled over into safe-haven buying in gold and sharply boosted the yellow metal’s and silver’s prices,” he said to Kitco News.
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Bitcoin Could Retest $12,000 Levels
Amid the FTX-Binance fiasco, leading crypto analyst Altcoin Sherpa predicted that Bitcoin could retest the $12,000 level. BTC’s price action in the next two days and the weekend can emulate its direction for the next week.
“BTC: Here are my lower levels if/when things get really bad. $12K would be very strong support, let’s hope the price doesn’t get there. Notes on the chart,” he tweeted.
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However, if BTC plummets to $12,000 in the coming weeks, another round of buying would ensure BTC briefly spikes in price. Bitcoin most likely will attract an increase in buying pressure if its price reaches around the $12,000 mark.
Also, Bloomberg strategist Mike McGlone predicted that Bitcoin could gain support levels at $10,000. He warned that the FTX crisis could instigate the “macroeconomic dominoes” that could take BTC down to these levels.
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At press time, Bitcoin was trading at $16,543 and is down 5.6% in the 24 hours day trade. BTC is also down 75.8% from its all-time high of $69,044, which it reached on November 10, 2021.