Institutions short Bitcoin, Bitcoin may drop to $40,600?
Bitcoin price attempted a rebound wave above $57,500. However, bears were active near the $58,500 resistance level. A high was formed at $58,508 and the price started to decline again. It retested the $55,600 support area.
A low was formed at $55,601 and the price recently started a wave of recovery. It broke the $56,000 and $56,200 resistance levels. It cleared the 23.6% Fib retracement level of the downward move from the $58,508 swing high to $55,601 low.
Bitcoin is currently trading below $57,200 and the 100 hourly simple moving average. On the upside, the price is likely to face resistance near $57,000. There is also a connected bearish trend line forming with resistance at $57,050 on the hourly chart of the BTC/USD pair.
If Bitcoin fails to rise above the $57,750 resistance area, it could start another decline. The immediate support on the downside is near $56,000.
The first major support level is $55,600. The next support level is now near the $55,000 area. Any more losses could drop the price to the $53,500 support level in the near term.
BTC has been falling since the signal appeared, and its price is currently located at the $57,000 level. Therefore, the bearish effect of this pattern may have taken hold.
As for how deep this decline could take Bitcoin, Martinez pointed to the $51,000 support level. This level corresponds to the 0.236 Fibonacci retracement level of the recent BTC top. Fibonacci retracement levels are based on the Fibonacci sequence, where each number in the sequence (over 5) is divided by the next number, producing a ratio that remains consistent throughout the sequence.
Bitcoin may find support at this next such important ratio, but analysts note that if support at $51,000 is breached, the cryptocurrency could eventually fall all the way to $40,600, which corresponds to the 0.382 Fibonacci retracement level. If BTC does eventually revisit this level, its price will fall more than 28% from current levels. It now remains to be seen how the trajectory of this asset develops.
