3 REASONS WHY BITCOIN PRICE COULD FALL TO $14,000
Bitcoin fell drastically this week, paring some of its December gains and maintaining its stretch of volatility on profit-taking sentiment among daytraders.
Most actively traded bitcoin derivatives plunged by an average of 13 percent to $17,705 from their all-time highs established last week. Meanwhile, the flagship cryptocurrency’s spot rate is still up 70 percent in the fourth quarter, signifying that its latest move downhill could be an organic bearish correction.
Investors tend to buy Bitcoin when they are fearful of the global economy’s outlook. This trend boosted the cryptocurrency’s demand earlier this year after the US Federal Reserve’s cheaper lending and unlimited bond-buying facilities reduced the appeal of the traditional safe-havens like the US dollar and the Treasury.
Nevertheless, a confluence of at least three fundamental indicators and technical fractals suggests that Bitcoin’s price may continue to head lower in the coming sessions.
The 20-day exponential moving average serves as a short-term bias indicator for Bitcoin traders. If the cryptocurrency’s price holds the wave as its support, its likelihood of trending upward becomes high. Nevertheless, slipping below it extends the downside move a majority of times.
Since November 26, Bitcoin has tested the 20-DMA at least four times for a breakdown move. But it also met resistance from bulls, which led to solid rebounds — one of them even leading to the new all-time high near $20,000. Therefore, the cryptocurrency has the potential of paring its recent losses if it manages to float above the 20-DMA level.
But Bitcoin’s weekly chart provides a more downside outlook.
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