Breaking: Bitcoin (BTC) Price Risks Falling Below $21,000, Here’s Why

Source : coingape.com

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The Bitcoin (BTC) price can fall below $21,000 as the bear hug tightens. The price recently touched a high of $25,135 and retraced to a low of $23,243. The downward price trend has formed a regular bearish divergence with a short-term target of falling to $21,000-$20,000.

The Crypto Market Fear and Greed Index has tumbled from 47 to 30 in just a week and 41 to 30 in a day.

Bitcoin (BTC) Price Can Decline Below $21,000 Amid Sell-Off

The Bitcoin (BTC) price has fared a bullish movement despite interest rate hikes and recession fears, making a rally above the $25,000 level. However, bulls are fading and need to show more power to keep the price in an uptrend. A slight selling pressure can negate the uptrend, pulling Bitcoin into the $21,000-$20,000 range.

Moreover, the Bitcoin (BTC) price trend in recent weeks has formed a bearish divergence pattern in the MVRV 7-day Detrend Oscillator. It suggests the BTC price can fall below $21,000. Applying a detrend filter to the price trends helps identify market bottoms and peaks by eliminating long-term price noise.

Bitcoin (BTC) MVRV 7D Detrend Filter. Source: CryptoQuant

Bitcoin (BTC) is in a downward trend for the long term, specifically since November. However, the price has shown upside movement in the last 1-month. The descending channel in a daily timeframe indicates the BTC price was preparing to break above the channel, but it fails to break the $25,000 psychological resistance level.

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Bitcoin (BTC) Price in 1D Timeframe
Bitcoin (BTC) Price in 1D Timeframe. Source: TradingView

Moreover, the price trend seems to have changed after the recent pullback to $23,243. Bitcoin has now reached an inflection point that will decide the upcoming price movement.

The 20-EMA (red) did move above the 50-EMA (blue) to confirm bullish momentum. However, the bulls failed to build momentum and seem to be fading. The 20-EMA may likely move below the 50-EMA again, which will confirm a bearish movement below $21,000.

What’s Creating the Downward Pressure?

The U.S. Federal Reserve in Wednesday’s FOMC meeting confirmed the need to continue raising interest rates to control inflation. Moreover, Bitcoin social sentiment has fallen on the negative side and exchange inflows have increased.

The profit booking on upper levels is creating selling pressure. According to crypto analyst Michaël van de Poppe, it is crucial to break above $23.7k to trigger an upside movement towards $24,000. However, a retest below $23k can be expected for an upside move to $28k.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.