Bitcoin (BTC) is currently experiencing a temporary relief bounce from broader selling pressure, which means the crypto asset still risks tanking all the way to $30,000 before May, a new analysis warns.
The flagship cryptocurrency has been on a roller coaster ride this year, plunging from $47,345 on Jan. 1 to a low of $35,030 just twenty days later. Since then, BTC has regained some ground but it is still stuck in a range of $47.500 to $38.500.
The drop below the critical support area of $40,000 on April 18, however, made the overall market sentiment quite bearish. Additionally, after breaking below the $40K level, Bitcoin was also faced with thin liquidity as the U.S. and other global equity markets remained closed for Easter Monday.
As we all know, when markets are “thin,” it means there is less trading activity taking place. This can lead to slippage and to large price swings when trades do occur, since there is less market liquidity to absorb the impact of the trade. For Bitcoin, this resulted in higher volatility and more dramatic price movements. In fact, BTC fell from $40.549 to an intraday low of $38,725 on Monday.
At the time of writing, Bitcoin was trading at $41,043, down around 14% from its year-to-date peak.
For Crypto Ed, a knowledgeable trader and educator in the space, a near-term BTC pullback to $37.500 could be on the cards before a rebound kicks in.
“First [BTC] need[s] to reclaim $40,000. If we manage that, it’ll certainly give a bullish impulse to the market,” he commented in his latest YouTube update, adding that as the upside continues a $43,000 short term print is possible.
Should that happen, however, Crypto Ed believes that based on his Elliott Wave analysis, Bitcoin could start retracing and a retest of the $30,000 support level remains a possibility.
“That’s the risk for the coming, let’s say, two weeks,” he noted.
Popular Twitter account Bitcoin Jack is another analyst who told his 245K followers that more capitulation is underway.
Room for a squeeze up but then heading to the monthly level below in due time is where my thinking is at
Guessing early May to decide major trend in to summer time pic.twitter.com/Zo8hARsyo8
— //Bitcoin 𝕵ack 🐐 (@BTC_JackSparrow) April 18, 2022
Cryptocurrency markets have been in a state of flux over the past few weeks, with Bitcoin seeing large swings in price. While there are signs that the market may be starting to rebound, there is still significant risk that BTC could drop even further. As mentioned, analysts are predicting that BTC could potentially fall all the way down to $30,000 if it does not stabilize soon.
Disclaimer: The information provided is not trading advice