Bitcoin recently fell to $65,000 after a sharp drop below $57,000, surprising many. In this new reality, the market must react in some way. If BTC falls below the key level of $57,000, here are three possible scenarios.
200 EMA Support Failure
If Bitcoin falls below $57,000, the 200-day Exponential Moving Average (EMA) will no longer serve as a support level. This is a key technical indicator for assessing the overall trend. Losing this support could push Bitcoin into bearish territory and potentially intensify selling. As traders and investors lose confidence in Bitcoin’s ability to hold key support levels, this could lead to further price declines.
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Following news from Mt. Gox, Bitcoin is losing its dominant position in the cryptocurrency market. Gox’s liquidation.
Clearing Growth
Many buyers may try to take advantage of the dip to buy BTC at around $56,000. However, if the cryptocurrency cannot maintain this level, more liquidation may occur. This could trigger additional sell orders, further depressing prices. Increased selling pressure may make it more difficult for Bitcoin’s price to stabilize, accelerating the decline.
Potential Sales and Market Gridlock
If Bitcoin falls below $57,000, some institutions may stop selling due to a lack of liquidity. This could lead to a sideways market, with leading cryptocurrency exchange prices between $55,000 and $60,000 as buyers and sellers wait for more favorable conditions. On the other hand, if institutional investors continue to sell, BTC may drop to $50,000. Institutional investors have a significant market share and a strong influence on Bitcoin’s price. Continued selling may make it difficult for Bitcoin to recover in the short term, potentially leading to a long-term bear market.
