The Bitcoin price is under intense pressure even as China becomes accommodative of the currency. The BTC is trading at $55,236, which is 7% above the lowest level on Sunday but is 15% below its all-time high (ATH). Its market cap is more than $1 trillion.
What happened: There are two reasons why the Bitcoin price has crashed recently. First, the bull run into the Coinbase listing was relatively overstretched. In such situations, many holders tend to exit in a bid to take profits.
Second, there are regulatory concerns. As we wrote last week, Turkey has become the next major emerging market currency to announce plans to ban the currencies. This will happen later this month even as the Turkish lira remains under pressure. India has also proposed banning these currencies.
However, there are some positives for Bitcoin prices. For one, the US dollar has dropped to the lowest level since March 1. The weaker dollar is usually a positive factor for Bitcoin and other currencies. Also, China seems to have embraced the currency. In a statement earlier today, Li Bo, the deputy governor of the PBOC called the currency an “alternative investment.” This is a progressive tone considering that the country has banned some currencies and ICOs. He said:
“We regard Bitcoin and stablecoin as crypto-assets … These are investment alternatives. They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”
Bitcoin price prediction
Last Friday, we accurately predicted that the BTC price would decline because of the rising wedge pattern that was forming. The currency then dropped $51,296 and then attempted to rebound yesterday when it rose to $57,290.
It lost some of these gains and is now trading at $55,185. On the daily chart, the price declined to the 23.6% Fibonacci retracement levels. It has also formed a small ascending channel pattern and is slightly below the 25-day and 50-day moving averages.
Therefore, in my view, the upward trend is still intact and the price will soon retest the all-time high, which is along the upper side of the channel. However, a drop below $50,000 will invalidate thebullish case.
BTC price chart
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