For the second time in a month, Bitcoin fell below $30k, with cryptocurrency market insiders and traders predicting new lows in its value.
The latest fall, showing Bitcoin tumbling by at least 5% on the last 24 hours, comes after warnings that continuing global crackdowns on cryptocurrency mining operations and trading worldwide could continue to plague the market with greater levels of instability.
Bitcoin’s latest plunge to values below its $30,000 threshold has rippled across the market, with prices of other major cryptocurrencies like Ethereum, Cardano, Dogecoin and even stablecoins like Tether also trading down on Wednesday.
This follows a plunge for stock markets in the UK, Europe and the US as the latest lift in coronavirus restrictions in England strengthened economic concerns as coronavirus cases rise and the Prime Minister Boris Johnson self-isolates at Chequers.
Bitcoin (BTC) price falling below $30K broke below a long-standing support wave that was instrumental in keeping its strong bullish bias intact after March 2020’s crypto market crash.
Dubbed the 50-week simple moving average, or 50-week SMA, the wave represents the average price traders have paid for Bitcoin over the past 50 weeks. Over the years, and in 2020, its invalidation as price floor has contributed to pushing the Bitcoin market into severe bearish cycles.
For instance, the 50-week SMA acted as support during the 2018 bear market.
The wave helped prevent Bitcoin from undergoing deeper downtrends — between February 2018 and May 2018 — as its price corrected from the then-record high of $20,000.
Similarly, the wave provided Bitcoin with incredible support during its correction from its $15,000 high in 2019.
Moreover, it held well as a price floor until March 2020, when the arrival of the COVID-19 pandemic caused a global market crash.
Pseudonymous chartist “Bitcoin Master” shared concerns about Bitcoin’s potential to undergo an 80% average price decline upon breaking bearish on its 50-day SMA.
The analyst noted that if the said fractal plays out, BTC/USD exchange rates could crash to as low as $13,000.
Vijay Ayyar, head of business development at cryptocurrency exchange Luno, noted that Bitcoin could drop further.
In comments to Bloomberg, the former Google executive said the BTC/USD exchange rates could fall to as low as $20,000.
Nonetheless, he anticipated the pair to retest $40,000 on the next bounce.
“We’re going to need to form another base first before resuming another bull trend,” Ayyar noted.
“We are going to be ranging between $20,000 and $40,000 for the rest of the year.”
Jehan Chu, the founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital, placed a safe downside target near $25,000 but warned about accelerated sell-offs should bulls fail to log a rebound from the level.
He said: “Q1′s crypto market momentum has stalled and is threatening further reversal potentially below the $25K levels.”