The stock market has reversed, and now it’s going lower and lower…
Bitcoin: Bullish Market is Over
2021-07-20 • Updated
What is happening?
Bitcoin has closed its daily candle under the 50-week moving average for the first time since April 2020. The last time Bitcoin broke through this resistance it fell by 57%. If the situation repeats the price will reach approximately $13000 during this bearish market. Also, it broke through the key support level of $31000, which was holding the price from January the 4th, 2021.
The plunge in bitcoin came after a big sell-off in the global stock market. Traders and investors try to hedge their savings, that is why they prefer the US dollar and Treasuries to risky assets like bitcoin.
What puts bitcoin under pressure?
In May 2021, China banned mining and trading cryptocurrencies. China’s central bank also reminded finance and fintech companies not to offer crypto-related services to customers. China was one of the major countries in cryptocurrencies mining, that is why the situation around bitcoin will remain questionable for a while.
On the daily chart, the falling wedge with a bullish divergence has occurred. If the price breaks the top line of the wedge the target will be $34500, which is approximately the 50-day moving average. If the price does not break this resistance, it will drop to the $23500 level.
The 50-week moving average is historically the key support level for bitcoin. If the price does not stick above this line by the end of July 25th, the first long-term target will be $23500.
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