BTC/USD traded below $30,000 for the first time since January. Musk, China, and Gold among the catalysts for the Bitcoin price decline.
The last 5 weeks will go down in history for Bitcoin.
BTC/USD set a new record in April, just shy of $65,000. just over a month later, the Bitcoin price was trading below $30,000 in one of the biggest sell-offs since the bull run of 2017.
Bitcoin Price Corrections
An Elon Musk tweet, regarding Bitcoin mining’s reliance on fossil fuels was to blame for the first liquidation phase. The Bitcoin price was looking quite healthy and trading close to $60,000 prior to the 12th of May Tweet.
The price reacted negatively to the news and slid below $50k, despite counter-arguments from several highly-regarded industry titans.
The selling gathered pace over the next five days, and the Bitcoin price slid to $42,000.
BTCUSD initially found some support at the January high of $41,800, spending the following two days trading between $46,000 and $48,000.
The pause in the price led the market to believe that the worst was over. However, the worst was yet to come.
A headline on Reuters suggested that the Chinese government was about to initiate a crackdown on cryptocurrency investing. This triggered another bout of heavy liquidation, sending the Bitcoin price below the 200-Day Moving Average at $39,923.
The China news, is in fact ,not news at all. The headline appears to be a rehash of a story thats been around for quite some time.
They say bad news comes in threes. JP Morgan reported that Institutional Investors have started to rotate their Bitcoin holdings back in Gold.
This put further pressure on BTC/USD, and the liquidation accelerated to $29,800.
A supporting trend line at $30,000 gave longs some relief. The price staged a recovery into the close, to finish the day -15% at $37,600.
Bitcoin Price Outlook
BTC/USDis currently between a rock and a hard place. The 200-Day MA is now overhead resistance just below $40,000.
The supporting trend line at $30,000 is supporting the price.
If BTC/USD can recover the $40k level, it might indicate that the recent decline was just a ‘healthy’ bull market correction.
If the price closes below $30,000, it could be the start of a much larger decline and put the Bitcoin price in danger of testing the December 2020 highs of $20,000.
The price performance over the next couple of days will give traders a better idea of what lies in store in the weeks, and months ahead.