Why did the cryptocurrency market plummet? Will Bitcoin (BTC) price recover to $60,000?
The cryptocurrency market is facing an extreme bear market that has caused the global market capitalization to drop by nearly 4%. Moreover, the trading volume has also dropped significantly, indicating a decrease in trading activity. One of the main reasons could be the issuance of Mt. Gox, with more than 50,000 BTC in circulation. However, the creditors initially seemed to hold the tokens, but the growing sell-off volume indicates mixed sentiments.
While the Bitcoin price is falling, ETFs have seen positive inflows, with the highest inflow reaching $485 million. Therefore, it is believed that the possibility of a bullish rebound still looms over the cryptocurrency, regardless of the high bearish sentiment. In the short term, the BTC price seems to have completed the retracement, and therefore, it may be preparing for a small rebound.
BTC price is trading inside a rising wedge; therefore, a nominal pullback is expected. With the continued bearish action, sellers are expected to be suppressed, which may lead to a period of continued downtrend. The $63,550 level can be considered important as the trend has reversed after touching this area. Therefore, with the level below $63,500, bulls jumped into the market and a rebound seems imminent as the RSI triggered a bullish divergence.
On the contrary, as the RSI is still above the lower band, the possibility of forming another lower high is imminent. This could lead to the price breaking the temporary support level, in which case the 100-day and 200-day moving averages ($62,743 and $61,743) could act as strong support levels. However, if the bulls fail to hold these support levels, in an extremely bearish scenario, the Bitcoin price is expected to fall below $60,000 and test the monthly low of around $59,200.
Therefore, the next few days can be very important for the Bitcoin (BTC) price as it may determine its next plan of action.
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