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Bitcoin price has been falling over the last 24 hours, potentially signaling that the recent bull rally has come to an abrupt end.
But what are the factors behind Bitcoin’s latest drop, and how far might the crypto asset dive before it finds support?
Bitcoin Price Inches Below $8,300, But Is There Much Further to Fall?
The leading cryptocurrency by market cap has spent the last six months locked in a downtrend. However, that downtrend was considered broken by many during the recent bull rally in Bitcoin, causing many to expect at least a short-term uptrend to follow.
Related Reading | Current Bitcoin Trend is Repeating the Bull Run to $20k in 2017, And It’s Mega Bullish
And while Bitcoin price did rise as much as 35% in less than 30 days, it failed to break through overhead resistance and reclaim past highs.
Now, as of this morning, Bitcoin price pierced through $8,300 temporarily after a more than $400 selloff began in the late-night hours.
The crypto asset is back above $8,300 currently, however, it is not until prices much lower where Bitcoin could find support.
The drop in price is surprising for many, but there may be a variety of factors influencing the bearish movement.
Factors Behind Today’s Crypto Market Crash
Notably, Bitcoin price failed to break above the 200-day moving average, which may have signaled to larger investors that the crypto asset wasn’t yet for a new uptrend, and started to sell the asset to reduce risk.
Bitcoin price may be headed back to retest the 50-day moving average, which is currently sitting at around $7,500.
Before it reaches that key level where support could be found, the cryptocurrency is likely to test support levels at $8,000 to $8,200, then lower at $7,600 to $7,800.
The leading cryptocurrency by market cap must not fall back below $7,400 where the inverse head and shoulders breakout confirmed, or else a new low could be set in the days following.
With Bitcoin’s halving ahead, and after two full years of bar market, it could be on the verge of a major breakout. But for that to happen, the 200-day moving average must be taken, with multiple daily closes above it along with a retest of resistance turned support.
Related Reading | The Case For Why $6,400 Wasn’t Bitcoin’s Local Downtrend Bottom
In the worst-case scenario, the current top could follow the path of the July 2018 rally, which eventually led the cryptocurrency to reach its current bear market low of $3,100.
Breaking down to set a new local low, could cause the market to panic, and a retest of the lowest ranges over the last two years may need to be tested and confirmed as support for an uptrend to begin again.
Featured image from Shutterstock, Charts from TradingView