• Bitcoin smashes below several critical support levels.
  • Chinese news might have triggered the sell-off.
  • FXStreet's Forecast Poll shows modest bullish bias.

Let's face it. Bitcoin (BTC) is aiming to finish the third consecutive week with losses. The first digital peaked at $13,868 at the end of June and has been losing ground ever since. Currently, it is nearly 50% down from the recent top. While the sell-off stopped at a psychological $7,000, the coin is vulnerable to further losses amid the bearish technical setup.

From the long-term perspective, BTC/USD broke below both SMA50 (Simple Moving Average) and SMA100 on a weekly chart ($7,167 and $7,527 respectively). This is a strong bearish development as the price has been trading above Since March 2020, while the previous bearish breakthrough below this line (May 2018) resulted in a long-term downside trend that culminated at $3,126 on December 2018. 

Obviously, we will need to see a sustainable move above this handle to mitigate the initial bearish pressure and allow for an extended recovery towards $7,700-$7,800 area that limited the decline for eh best part of October. The next resistance is created by a psychological $8,000 and followed by a confluence of SMA50 and the middle line of the daily Bollinger Band at $8,500. 

On the downside, a decisive move below $7,000 will open up the way to pivotal support at $6,500. It is created by the lower boundary of the downward-looking trend line. Once it is broken, the bottom will fall out of the cryptocurrency market. A sustainable move towards the lowest level since May 2018 may trigger a panic selling, which will result in a self-sustained bearish market. The price may fall as low as $5,000 and test SMA200 weekly (currently at $4,894). Notably, this line stopped the decline in December 2017. Also, it is worth noting that the price has never moved below SMA200 weekly.

The downward-looking RSI (the Relative Strength Index) on both daily and weekly charts inspires little to no optimism. Though the daily indicator has entered an oversold territory signaling that the price may rebound before the sell-off is resumed. 

BTC/USD, the daily chart

Halving, Bears and Miners

As bitcoin (BTC) is getting closer to its halving date, some cryptocurrency experts get nervous. Halving will take place approximately in May 2020 and it will slash miners block reward in half. Traditionally, this event inspires a bullish run for the coin approximately six months ahead of the halving. This time seems to be different though.  As a crypto analyst Willy Woo explained recently, a bearish trend preceding the halving way eventually result in an imminent drop to as low as $4,500. 

As the price goes down, small miners struggle to survive and have to wind down their business. The same happened during the bear market in 2018. However, halving is going to deal them another severe blow, which will lead to another wave of bearish sentiments.

Also, there is a theory that halving is already priced in, which means that the further upside potential is limited. From December 2017 low to June 2019 high, the price gained nearly 350%, which means that we might need a further correction before another upside wave. 

Chinese woes

China continues fighting the approach towards the cryptocurrency industry. Thus PBOC Shanghai Head office announced the decision to strengthen regulation and control over the cryptocurrency industry. The news may have triggered the sell-off during European hours on Friday; however, we have seen a slew of harmful data from China, including the rumors that the local police raided Binance and Bithumb offices in Shanghai. Notably, both cryptocurrency exchanges denied the information.

The Forecast Poll of experts worsened since the previous week. While expectations on all timeframes are bullish, the average price forecasts are below 8,000. The overview chart shows lowering average targets all over the three timeframes polled, though. The 1-quarter average forecast is down almost 1000 pips, from 8870 last week to 7880 this one, clearly showing the influx of pessimism that the week brought the Bitcoin market.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

BTC/USD risks a drop to $10,500 amid bearish technical set up

Bitcoin (BTC/USD) reversed Friday’s temporary reversal and resumed the previous bounce on Saturday, only to find stiff resistance once around the $10,800 region. A potential rising wedge formation spotted on the hourly chart. Acceptance below 10,693 could revive the bearish bias.

More Bitcoin News

Ethereum Price Analysis: ETH faces strong resistance wall at $360

Ethereum sees a steady rise in activity and market capitalization, all thanks to the ongoing DeFi boom. The coin bounced up from the $320 support line this Thursday and has gone up to $350 over three days. 

More Ethereum News

NEO Technical Analysis: A test of 200-HMA likely on NEO’s road to recovery

NEO/USD witnessed good two-way businesses on Friday, having finally settled in the red after fading a spike above the $23 mark. The buyers have regained control this Saturday, allowing a tepid bounce in the spot.

More NEO News

Ripple Price Forecast: XRP flashes sell signal in the hourly chart – Confluence Detector

XRP/USD has had three straight bullish sessions. XRP daily confluence detector shows moderate-to-strong resistance at $0.245. On the downside, there are two healthy support levels at $0.2425 and $0.24.

More Ripple News


Bitcoin Weekly Forecast: Keep calm and HODL on until the USA elects the president

Bitcoin (BTC) partially regained the losses incurred at the beginning of the week; however, the upside momentum is still too weak to take the price out of the bearish territory and ensure a sustainable recovery. 

Read the weekly forecast