Bitcoin needs to hold support to avoid severe sell-off
In the last seven days Bitcoin has shed approximately 25% of value, if it fails to hold onto current support at roughly $29,000, Bitcoin could be in for an even worse week ahead.
As of 4:45 EST, Bitcoin is trading up by roughly 3% on the day at $31,030 (Coinbase). Confirming the bearish market sentiment BTC futures are trading lower than their spot counterparts at $30,990. When future pricing of a commodity or asset is below the spot or live pricing, it is signaling that market participants believe overall that the asset or commodity is likely to decrease in price in the future.
If we do a Fibonacci retracement from pricing a week ago at around $40,000 to the lows of yesterday at around $30,000, it is clear that Bitcoin failed to move past the 23% retracement level, at roughly $32,130 on its bounce higher today. This is indicating lower prices are likely still. If Bitcoin fails to hold support at $29,000, then $20,000 is certainly on the table. I believe that Bitcoin will hold $10,000 even in the worst-case scenario, but if we were to get that low, that would entail a further decline of over 60%. That is why Bitcoin needs to hold onto current support to avoid a further bloodbath, opening up to prices not seen since 2020.