The price of Bitcoin is falling through support. What does it mean? Reason(s) to be concerned?
Let’s first review what is happening, before we look into the question what it means.
Essentially, the Bitcoin chart has 3 major support (trend) lines:
Moreover, to make things more complicated, there is horizontal support which, arguably, is even more important:
What does all this mean?
It means that Bitcoin should continue to trade above $7000 to remain in a strong cryptocurrency bull market, which, if it does, will likely mean that the next cycle higher will start around summer time.
If $7000 gives away it is really crucial that the $5000 level is respected. If not, it does NOT imply that the bull market is over, but it would imply that repair time will be longer, and, arguably, the next cycle up will only start late this year.
In case $5000 does not hold, then the lower support levels are $3000 and $1500. Even if Bitcoin would fall to those price levels it would still remain in a long term bull market. However, repair time will be really long, arguably 12 to 18 months, in which case we would be in a 2014-alike scenario when Bitcoin crashed, took more than a year to stabilize and started rising again 1.5 year later.
For now, we are closely watching how and when Bitcoin will dip. It will be the basis for our forecast on when crypto prices and blockchain stocks will start rising again.