Bitcoin price remains uncertain as potential crash looms over global markets
On-chain data suggests that if Bitcoin touches its 200 Weekly Moving Average anytime soon, it may dip as low as AUD$22K.
- BTC's total capitalisation is currently at AUD$805 billion while its crypto market share lies at 43%.
- The digital currency is mustering support around AUD$42,000, but a further dip could also be on the cards.
- Bitcoin's halving event in 2024 will see the currency's reward ratio drop from 6.25 BTC to 3.125 BTC.
Bitcoin's price action has continued to hover between AUD$40,000 and AUD$43,000 over the past week, with the asset's monthly losses now at -24%. At press time, BTC is trading at AUD$42,392.
The volatility comes amidst the stock market witnessing a substantial drawdown, with the S&P 500 and Nasdaq 100 losing 2.4% and 3.5% respectively. Experts believe the ongoing heavy correlation between the crypto and stock markets could see BTC stoop down to AUD$40,000 (US$28,300) in the near term, especially if it fails to retain its pivotal AUD$41,300 (US$29,400) resistance.
While stocks, especially tech ones, seem to be controlling the price of Bitcoin, the currency has held ground surprisingly well. Most stocks are currently exhibiting way larger daily drops than BTC. On-chain data suggests that the BTC/USD pair is forming a strong wall of support around its current price levels. A dip to below AUD$40,500 (US$28,800) seems quite unlikely within the next 7 days.
Another major crash incoming?
Analysts note that if Bitcoin were to re-test its 200WMA (Weekly Moving Average) – an important indicator used by traders to identify long-term changes in the price of an asset – anytime soon, the asset could enter into a downward price spiral.
The 200WMA has served as a lifeline throughout Bitcoin's history, with the level never having been definitely broken to date. It currently lies at US$22,000, and if broken, will see the market move into "unknown bearish territory".
New highs only after 2 years?
Bitcoin's chances of recapturing its all-time highs of US$69,000 remain bleak. Fresh highs may only be achieved during the latter half of 2024 since it marks a time when BTC's next halving will take place. Halving is an event that takes place every 4 years and reduces BTC's profit ratio by 50%. In 2024, the asset's reward output will reduce from 6.25 BTC to 3.125 BTC.
Disclosure: The author owns a range of cryptocurrencies at the time of writing