Bitcoin Threatens Break of This Key Support Area – How Low Could the BTC Price Go?
Bitcoin (BTC) is down sharply on Wednesday, with analysts citing a massive sell order on the world’s largest crypto exchange Binance and hotter-than-expected UK inflation data as weighing on the price action.
BTC/USD was last changing hands almost bang on the $29,000 level, nursing losses of around 4.5% on the day, putting the cryptocurrency on course for its worst one-day performance since the 9th of March.
Despite this, liquidations of leveraged long positions in Bitcoin futures remain relatively contained at just over $40 million, as per coinglass.
That’s not even the highest this month, suggesting the latest move lower hasn’t triggered much of a long squeeze.
For now, Bitcoin is managing to hold up above the key psychological level, as well as its 21-Day Moving Average just above it at $29,043.
Support in the form of the late March/early April highs in the $28,780-$29,380 area also seems to be keeping a floor under the price for now.
But a break below this key cloud of support could open the door to a quick drop to the $28,000 level, where BTC would hit a downtrend from recent highs.
If this level was to also go, the door would then be opened to a potential drop towards resistance-turned-support in the $26,500 area, roughly in line with where the 50DMA also resides.
That would mark a drop of 8% from current levels.
Below that, the next major support zone is in the $25,200-400 region.
If Bitcoin was to drop back to the mid-$20,000s, this could mark a massive opportunity for bulls to add to long positions, or those who missed out on the March rebound from sub-$20,000 lows to get into the market.
That’s because, despite the ongoing risk of short-term volatility and swift 20% corrections (as seen in late February into March),
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