The market cap of the world’s leading cryptocurrency has established its new yearly bottom.
Bitcoin on Monday continued its downtrend, and its valuation dropped to a new bearish low at $92.53 billion. At the same time, the price of the digital currency fell to an average of $5,322, according to aggregate data available at CoinMarketCap.com. Overall, the bearish action intensified the possibility of Bitcoin establishing a double bottom anytime this year.
As reported on CCN last week, the forking of Bitcoin Cash has turned out to be the main catalyst behind the market-wide downtrend. Bitcoin is an asset that is more stuck inside unwelcomed negativity, especially when the chief of a big mining company decided to reallocate their Bitcoin hash power to support Bitcoin ABC, one of the Bitcoin Cash blockchain splits. While the trend should live for short, it has left a big dent on the face of the entire crypto market, which now appears more unstable to potential investors than ever.
Analysts now forecast an extended downside run for Bitcoin. Leading crypto pundits Willy Woo and Crypto Rand believe that the digital currency could drop further towards the $4,500-5000 range. The prediction via Bitcoin NVT ratio, which divides the digital currency’s market cap by its average daily volume, is also bearish. It plays into a narrative of bitcoin doubling down its value in the near-term future.
A different analysis by Bitcoin bull Tom Lee predicts Bitcoin to reach $15,000 by the end of this year, calling the aftereffects Bitcoin Cash forking short-term. However, Fundstrat founder has deviated away from its $25,000 prediction made earlier this year, indicating that it is going to change every time in the face of new fundamentals.
The latest price action does not surprise CCN’s technical outlook. It had predicted that Bitcoin price would attempt to retest its previous low – or the lower trendline of the current falling wedge formation at most. There is a strong likelihood that bulls will try a strong upside correction, giving adequate long opportunities towards the level mentioned via the Fibonacci retracement graph in the chart below.
A further breakdown from here could bring the Bitcoin market towards the bearish targets of prominent analysts – as mentioned above. Therefore, $5,000 serves as a potential primary downside target should the price breaks below the lower trendline of the falling wedge formation.
Featured Image from Shutterstock. Charts from TradingView.