Difficulties in overcoming resistance, rejection at the $24,000 mark, and bankruptcies in the crypto market, are the reasons for the low price of Bitcoin.
The Bitcoin course had seen a sharp rise in recent weeks, which has leveled off somewhat in recent days. With the drop below $23,000, there are increasing signs that the Bitcoin price could fall back below the $20,000 mark. What are the reasons for a forthcoming Bitcoin crash?
The Bitcoin course experienced a stabilization in the last few days. After a failed break above $24,000, the price recently took a dip below $23,000. These losses were the biggest in several weeks.
In the last few weeks, the Bitcoin price has tried to break the upward resistance several times. But after multiple failures, the course had to suffer a setback and fell below $23,000.
The Bitcoin price could fall back below the $20,000 mark in the coming days and weeks. There are some signs of that at this point. Below are the three reasons why the BTC price may soon drop below this mark.
Failure to Rise above Resistance
For several weeks now, the Bitcoin price has been trying to break the $23,000 resistance. For a short time, the price was able to rise above the $24,000 mark, but had to fall back below $23,000. This missing bullish breakout has occurred several times in the last few weeks. The longer a break above resistance lasts, the more likely it is to fall sharply in response to a lack of a breakout.
Rejection at the $24,000 Mark
The last time the Bitcoin price was able to rise as strongly as it has in recent weeks was August 2022. Even then, the price was able to rally to the $24,000 mark. But at that time, the Bitcoin course was rejected at this mark and eventually fell below the $20,000 mark. The $24,000 level looks to be strong resistance in this bear market. In the absence of a breakthrough, the crash of the third quarter of 2022 could be repeated again.
Bankruptcies in the Crypto Market
The year 2022 has seen many major crashes in the crypto market. These included Celsius, Terra (LUNA) and most notably FTX in November. In market phases, these insolvencies are sometimes necessary to “clean” the market of bad players. A final purification process could take place in 2023. The bankruptcy of a major cryptocurrency company could be the trigger for the drop below $20,000.
Besides the three reasons abovementioned, it should be noted that last January, Sergio Morales, director of Cryptocity.press, assured that the headwind of the monetary tightening of the central banks of the different countries is expected, which “will be slow or deeper depending on the evolution of inflation levels”. And, at the same time, he said that it will be necessary to pay close attention to the advances in the regulation of the matter, mainly in Europe, where the final approval of the MiCa Law is scheduled for July.
By Audy Castaneda