Where are Bitcoin prices headed after dropping below $30,000?

Bitcoin prices have been experiencing some turmoil lately, dropping below $30,000 yesterday and reaching their lowest levels since July.

The world’s largest cryptocurrency by market cap fell below $29,900 last night on TradingView.

Since then, the cryptocurrency has rebounded somewhat, rising to $32,650 today, according to additional TradingView numbers.

Following this recovery, the digital asset has plummeted, and was trading near $30,750 at the time of writing.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Major market drivers

Analysts cited mixed factors when explaining these recent declines, including central banks raising benchmark rates and selling off assets they accumulated during the recent pandemic.

Many market watchers have pointed to risk-free trading when describing the recent downward movement in bitcoin prices. Scott Melker, investor, crypto analyst, and host of The Wolf Of All Streets Podcast, commented on this development.

“Bitcoin has fallen along with global markets as traders and investors take risks in the face of recession and inflation fears,” he said.

“Bitcoin has fallen below 30,000, and its tail is largely the result of Luna Guard dumping bitcoin into the market in a desperate attempt to mend the peg of terrestrial treasuries,” Melker said.

“This was an insult to being injured on a day off.”

Technical Analysis

Melker also provided some technical analysis, noting key levels of support and resistance that traders should consider.

“The psychological level of 30K remains significant, although technically 33K is the area to watch for bulls attempt to reverse major resistance back into support,” he said.

Richard Asher, Head of OTC Trading at BCB Group, spoke in detail on the matter, providing further details.

“While the market was focused on moving below 30,000 BTC which is the key level, last night’s drop was actually the fourth such move in the past 14 months,” he stated.

“The main support for us is 29,000, and breaking it would target a move to 25,500 and eventually the big 20,000 support that led to the rally last year when it collapsed,” Usher said.

Julius de Kempener, chief technical analyst at StockCharts.com, identified some similar support levels.

Since mid-February bitcoin has formed some intermediate support around 33-34K. The break below that level yesterday opened the way for a major support around 30K.”

“This level has been in effect since the beginning of 2021 and should be considered a key support level,” said de Kempener.

“A clear break down would release more downside risk as the next serious support level is only around 20K which is the 2017 peak (!) and a bunch of smaller peaks/highs in November 2020, before the break that took all Bitcoin way to 65K. “.

In addition to providing this input, the analyst also talked about resistance.

“Breaking these support levels means that they will return now as resistance progresses and BTC is banned in the near term. The aforementioned support level in the 33-34K area is now the first resistance level to watch.”

Usher also pointed out some of the main areas of resistance.

“Resistance levels accumulate at 33,000, 34,700 and eventually 40,000 which must be retaken to call the long-term low,” he said.

Possible market disruptions

Colin Bloom, CEO and founder of My Digital Money, said that bitcoin prices could experience significant fluctuations in the coming months, as the uncertainty surrounding the Federal Reserve’s policy decision impacts the cryptocurrency markets.

“There is a possibility that bitcoin will bounce back significantly in the next couple of months,” Bloom said.

“In fact, I wouldn’t be surprised if there were another sell-off that brought it down.”

Investors see a Fed rate hike, and all the uncertainty that comes with it, as a buying opportunity. He said the next Fed meeting will not be for another month and we are sure another rate hike is coming.

Only then will investors have confidence in which direction prices are heading, where the assets are heading, and where their investment is heading.

Keep the faith

Konstantin Boyko Romanovsky, founder and CEO of Allnodes Inc. Regardless of what the cryptocurrency markets do in the near term, investors must maintain confidence.

“Whether you invest in Bitcoin or other blockchains that are going to go up in the next bullish trend, the sentiment remains the same,” he said.

“We are past the point where blockchain and cryptocurrency can suddenly become obsolete.”

“So a sharp swing in cryptocurrency prices could be an opportunity to enter or re-enter the market,” said Boyko Romanovsky.

Disclosure: I have some bitcoin, bitcoin cash, litecoin, ether, EOS, and sol.

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