Bitcoin declined to under $36K to coincide with the biggest negative correction seen on the Dow Jones Industrial Average since 2020.
Following the worst price drop since 2020 of the Dow, and Nasdaq, the price of Bitcoin (BTC) also sank to under $36K. On Thursday, the Dow Jones Industrial Average plunged over 1,000 points to 32,997.97, while the NASDAQ Composite retraced 5% to 12,317.69. Both sharp reversals came after a rally in the stock markets the day before.
The Dow, Nasdaq Slump Likely Set Off Chain Reaction that Trigger Bitcoin Decline
Shortly after the general stock slump, BTC price turned up at around $35,571 on leading crypto exchange Binance. In addition, data from Cointelegraph Markets Pro and Trading View revealed that BTC midday dump coincided with the tech-sector sell-off. Furthermore, this development subsequently culminated in the close of the traditional markets.
The slump in BTC price also came after traders had ample time to ruminate over the Fed’s recent half-point interest rate hike. It should be noted that this hike represents the largest since the year 2000. The US central banking system chose to go this route in an attempt to reign in record-high levels of inflation.
Bitcoin and the Dow are both down as a result of speculative reasons.
Analysts Predict Where Bitcoin Price Heads Next, Identify Key Price Levels
As a result of the fall in Bitcoin, market analysts took to the charts to determine crypto’s next direction. According to analyst Michaël van de Poppe, the $37,500 threshold would be a distinguishing factor between bears and bulls. Van de Poppe explains that BTC bears will have a field day sinking price even deeper until the $37,500 price level is reclaimed. In addition, the independent market analysts also suggested that price may go on to test the $39K threshold once it manages to clear $37,500. In his own words:
“Then I’m assuming we’ll test $39,000 again as there’s a big gap in between. Under $37,500, nothing to say about bullish perspectives.”
Another market analyst who goes by the pseudonymous Twitter username Rekt Capital also provided insight into BTC’s price movement. Using the monthly chart as a reference point, Rekt Capital suggested that $38,400 was the new resistance level for bulls. As the market analyst put it:
“[BTC] saw another brief recovery back above ~$38400 (red)…Red seems to be figuring as resistance. Wouldn’t be surprised to see volatility around red throughout May Monthly Close above red is what’s most important to confirm a reclaim of red as support.”
Bitcoin Whale Behavior
On-chain data firm, Whalemap, attempted to analyze BTC whale behavior amid the latest market volatility. According to the data platform, “previous whale inflows at $46,551 were serving as an accurate resistance and a temporary mid-term top for Bitcoin’s range.”
In addition, Whalemap also noted the appearance of a “similar resistance” level at the $44,355 threshold. The on-chain data firm stated that this was because of “similar-sized whale wallets”. Whalemap capped off by identifying the aforementioned $44,355 price level as the new resistance line should BTC get there.
Currently, the overall crypto market cap is now $1.66 trillion, with Bitcoin accounting for 1.5% of that figure.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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