Summary
- Bitcoin's price is at risk of a major drop if it fails to close above $22,000 this week.
- The current price of Bitcoin is around $23,700, which is close to the all-time high of $24,200.
- Analysts are warning that a failure to close above $22,000 could lead to a sharp decline in the price of Bitcoin.
Bitcoin bulls have much to preserve in order to maintain the newly-won support, but a failure to do so could lead to a BTC price cascade below $20,000.
On March 5, Bitcoin (BTC) stayed close to a key support level, as the weekly candle close brought fresh fears of a breakdown. Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair had remained stationary since its abrupt fall on March 3, which was triggered by a margin call amid uncertainty over Silvergate Bank.
According to analyst Material Indicators, BTC price action had “lost key technical support” and that $22,000 — the sight of a recent resistance/support (R/S) flip — was now all that remained for bulls to hold onto.
Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, warned that should $21,300 fail to hold, $20,000 may not help to stem the exodus.
“Moral of the story: Dollar-Cost Average and have balls to buy when you don’t feel confident,” he advised.
Research firm Santiment queried why the market reaction had been so severe, noting that “#cryptocrash” had been a key of-and-on trending hashtag on Twitter, even though Bitcoin’s mild -5% pullback occurred more than three days ago.
“Typically, you can capitalize on this level of negativity on the markets, and this kind of overwhelmingly bearish sentiment can lead to a nice bounce to silence the critics,” they said.
As Bitcoin continues to remain in a tight range, investors have to be aware of the potential risks of a breakdown. If the key support levels fail to hold, the BTC price could easily fall much lower.