Bitcoin prices experienced a slump on Sunday April 18, 2021 after a tweet (now dismissed as false) set off a selloff spree not seen in the cryptocurrency market. This tweet put out an unfounded rumour about an investigation into money laundering by several cryptocurrency projects. This drove market fear that saw Bitcoin fall from $62,000 to as low as $50,000 before recovering to its present levels.

On April 22, news from the US government on the implementation of a 39.6% capital gains tax on wealthy Americans also triggered a short term selloff. This sent Bitcoin prices to as low as $46,000, but prices quickly recovered on April 23.

Prior to this slump, Bitcoin prices had experienced a massive upsurge, which was engineered by the entry of several institutional players such as Grayscale and Square, into the cryptocurrency market.

Following any massive price appreciation, some correction is expected. Our outlook sees the current Bitcoin price slump as a corrective move which will eventually make it possible for traders to acquire Bitcoin at cheaper prices.

This scenario presents the best possible buying re-entries for those who were priced out when Bitcoin traded above $60,000. 

The bullish trend remains intact, as price was able to hold at key support areas and formed the higher lows/high that confirmed the uptrend. Our outlook is for price to drop below 50,000 in the short-term, but this would present good re-entry opportunities for traders looking to catch the recovery at cheaper prices.

Technical Analysis

The weekly chart of the BTC/USD pair shows that the Bitcoin price action is in an uptrend, as it continues to form higher highs and higher lows. The uptrend sequence followed a 3-year consolidation period that saw Bitcoin prices oscillating between 3600 and 13330. 

The presence of an ascending channel on the weekly chart is also noted. This channel demarcates an area which is consolidating to the upside. Price is also seen to have bounced off the support formed by the channel's lower border, which places the low of the active weekly candle at a higher position than the previous weekly candles, thus cementing the uptrend. 

The daily chart shows that the price candles appear to have found support at the 50,116 price level, which is very close to the 50,000 psychological support. However, the active daily candle is presently pushing against the current support level, thus putting it at risk of a violation and a breakdown.

Barring any breakdown of this support level which brings the 78.6% Fibonacci extension (swing move from 10 December to 8 January 2021) at 48270 into focus, Bitcoin price is expected to get further uplift from the 50,000 psychological support level. This uplift could target immediate upside resistance barriers at 56071 and 60112 in the first instance. Further dip-buying opportunities also exist at 46203, 44138 and 41000. Any form of price retreat to these areas could see a strong bounce, which could be the impetus that buyers need to generate momentum to resume the uptrend recovery.

If 60112 is taken out, the next target for bulls would be the current all-time high at 64800. If this area is taken out, then we could see a march towards new all-time highs between 68,000 and 70,000, where the BTC/USD price candle are expected to meet the channel's upper border. 

A break of the existing all-time high forms the higher high needed to continue the uptrend.  

Sentiment

Long-term: bullish.

Medium-term: bullish.

Short-term: bearish.

Long-term and medium-term, BTCUSD’s trend remains bullish as the price continues to form higher highs and higher lows. In the short term, the price candles continue to exert downside pressure on the 50,000 support level. It is believed that there will be further bearishness in the short term to suitable support levels below 50,000, which will serve as dip-buying areas for uptrend resumption.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines. 

More Cryptocurrencies News
TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.

More Ton News
Maker Price Forecast: MKR could stage 40% rally

Maker Price Forecast: MKR could stage 40% rally

MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.

More MakerDAO News
USDT market cap crosses $120 billion as stablecoins continue their uptrend

USDT market cap crosses $120 billion as stablecoins continue their uptrend

The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.

More USDT News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP