Investors feared this, but they expected it, and it happened. BTC broke through the support level of $3,600 and dropped below $3,500. It had to happen. We wrote that Bitcoin’s chances of dropping below $3,500 were higher than going above $3,600.
Thanks to yesterday's sharp decline, the trading volume showed the highest value in 20 days.
Today, the Bitcoin market capitalization is 5,717 billion dollars. The total market capitalization is just over 111 billion dollars. The important level of 100 billion has become closer. In the case of a new decline in cryptocurrency, we will see market capitalization at this level. By the way, on December 15 last year, the market capitalization has already dropped to this psychological level.
28 January, BTC descended below the support area of $3,500- $3,480 and today has fallen to a daily low of $3,422. This minimum is close to the next important support level of $ 3,300.
If Bitcoin drops below $3,300, then it is obvious that the cryptocurrency will go to retest the $3,200 and $3,120 marks, which are the 2018 lows.
However, as the BTC/USD daily chart shows, the RSI indicator reaches a long-term support line just at level 30 (the border of the oversold zone). The Stochastic indicator also shows lows on both the 4-hour and 1-day chart. Moreover, a candle is formed on the 4-hour chart, which is crucial because it will show if the price stays on top of the trend line.
The above may lead to a slowdown of the decline with re-testing of previous support levels that have already developed as resistance zones. These areas can be $ 3,400, $ 3,480 - $ 3,500. Higher levels at the moment seem almost unreal.
As already mentioned, yesterday's volume was the highest this year, but it is still below the highs recorded last year.
At BitFinex, opening short positions on BTC increased to 26 thousand. This is still not such a great value that could trigger a market downturn.