The BItcoin price is deeply in the bear territory after a sudden change in conditions. The BTC is trading at $42,965, which is 35% below its all-time high of near $65,000. Its market cap has dropped to $800 billion while that of all cryptocurrencies has fallen to $2 trillion.
Why Bitcoin fell: There are several reasons why the prices of Bitcoin declined. First, in a statement, Elon Musk implied that Tesla may sell or has already sold its Bitcoin holdings. The announcement came a few days after the company decided to remove BTC as a payment option.
Second, there are swelling concerns about Tether, the biggest stablecoin in the world. In its report, the company said that its total fiat holdings were less than 3%. This is contrary to what the founders have long said that Tether is 100% backed by dollars.
Third, BTC is falling because of the rising possibility that the Fed will start tightening as US conditions improve. Such a situation will be bearish for the currency since the actions by the Fed have contributed to the recent bull run.
Bitcoin price prediction
Turning to the weekly chart, we see that the BTC price has faced substantial resistance in the past few weeks. The currency has struggled moving above $60,000. At the same time, it has moved below the 23.6% Fibonacci retracement level and is currently approaching the 38.2% retracement level. This is a sign that bears are prevailing.
Another notable thing is that the currency has dropped below the 25-week moving average. Therefore, in my view, the bearish trend will likely continue as bears target the 50% Fibonacci retracement level at $32,798. However, a move above $50,000 will invalidate this trend.
BTC price chart
Follow Crispus on Twitter.