After an extended bout of sideways trading within the upper-$6,000 region, Bitcoin’s bears finally gained the upper-hand over bulls, leading the benchmark cryptocurrency to plunge to its support within the lower-$6,000 region.
This sharp downwards movement that first began late-yesterday also seems to have pushed BTC below a key trendline that bulls were previously defending.
The decisive shattering of this level has led multiple analysts to concur that Bitcoin is poised to see some significant near-term downside in the hours and days ahead, with one trader forecasting a sharp decline to $5,000.
Bitcoin Ends Consolidation Period with a Sharp Selloff
At the time of writing, Bitcoin is trading down just under 6% at its current price of $6,250, which marks a notable decline from recent highs of nearly $7,000 that were set during buyer’s multiple attempts to propel BTC higher over the past few days.
The multiple rejections at this level, however, seemed to elucidate some underlying weakness amongst bulls, signaling that its multi-day consolidation period was likely to end in a downside movement.
In the near-term, it does appear that there is a significant amount of buying pressure around $6,100, which is the point at which bulls halted the selloff.
George, a popular cryptocurrency trader on Twitter, explained in a recent tweet that he believes BTC’s next stop is at $5,600, with his short-term bearishness only being invalidated if bulls are able to propel the crypto past $6,600.
“BTC: Only compounding my short if we get some kind of sweep of the high. Next stop is 5.6k imo. I’d flip bullish if we manage to reclaim 6.6k. Let’s see,” he noted.
Only compounding my short if we get some kind of sweep of the high. Next stop is 5.6k imo. I'd flip bullish if we manage to reclaim 6.6k.
Let's see. pic.twitter.com/QoTsUvYWpW
— George (@George1Trader) March 28, 2020
BTC Just Broke a Key Trendline, Leading One Trader to Target $5,000
This latest selloff does appear to have done some fundamental damage to Bitcoin’s market structure, as it also marked a break below an ascending trendline that bulls had been forming in the time following its drop to $3,800.
One trader is noting that the break below this level seems to have opened the gates for a sharp decline towards $5,000, which would mark and over $1,000 drop from its current levels.
“Something for the bears, BTC short-term bearish below the trend line, unless fakes out and crawls back above it. Eyeing low 5000s,” he said while referencing the below chart.
— CRYPTO₿IRB (@crypto_birb) March 28, 2020
The coming couple of days should provide investors with insights into where Bitcoin and the aggregated crypto market is heading next, as BTC’s imminent weekly candle close will offer valuable insights into the present state of the market.
Featured image from Shutterstock.