Bitcoin Might Collapse to $4,000, Technical Analyst Says
The cryptocurrency market, Bitcoin included, has had a string of bad days, and some technical analysts anticipate the bearish trend to persist.
The cryptocurrency market cap recently touched its lowest level year-to-date (YTD), and some technical analysts are predicting even worse days ahead. The crash was triggered by Bitcoin (BTC), which began sliding after news the US Securities and Exchange Commission (SEC) would delay its decision on an ETF product, but the worst performers turned out to be the top altcoins, some of which have hit their lowest level for the year. The sentiment is bearish as BTC’s price fell below its 50-day moving average indicator. According to technical analysts, this might signal a further dip, with one telling Bloomberg he would not be surprised to see the cryptocurrency trading at around $4,000.
Bitcoin, which hit its YTD low on June 29, improved slightly on Thursday and is currently moving sideways close to $6,470. The leading digital coin could not find support even after recent favorable news coming from Goldman Sachs.
Technical analyst Rob Sluymer, who works for FundStrat Global Advisors, told Bloomberg:
“You’re getting a bounce today, but I expect the next level of support down close to $6,100. It’s pretty early to make the case that you need to go long. It’s got to stabilize first.”
Another analyst, Mike McGlone from Bloomberg Intelligence, said Bitcoin might go even lower than that.
“Bitcoin is in dump mode, following the pump run-up on the potential for a US ETF. It may not subside until revisiting good support near $4,000 -- last year’s mean.”
Some will find $4,000 a surprisingly low level for Bitcoin, which has been trading in a range of $6,000 to $10,000 in the last few months, but Yale University economists went even further and assessed the likelihood of BTC crashing to zero. They found a 0.4% chance that the cryptocurrency would lose all value.
“The current implied daily disaster probability is about 0.4 percent for Bitcoin, 0.6 percent for Ripple, and 0.3 percent for Ethereum,” the report says.