Bitcoin (BTC) – Crashed below the $20,000 level exposing itself to further bearish developments

Bitcoin (BTC) – Crashed below the $20,000 level exposing itself to further bearish developments

Bitcoin (BTC) tumbled more than 13% at one point on Saturday, crashing below the closely watched $20,000 level to its weakest level in 18 months, as it extended a slide on investor worries about growing troubles in the industry and the general pull-back from riskier assets.

Technically the close below the 161.8% Fibonacci extension level of the last leg higher reinforced bearish sentiments and nourished the medium-term outlook, with Ichimoku indicators amplifying the case for further bearish developments in the forthcoming weeks. Particularly the price is distancing itself below the red cloud, and the directional lines are retaining a sturdy negative charge. Additionally, the momentum oscillators are holding deep in the bearish region.

Hence, the risk is still skewed to the downside and following a drop below Saturday’s low at 17,600, the price will tumble towards the 15,000 – 14,100 zone, with the latter being the 261.8% Fibonacci level. Lower, the descent could pause somewhere around the 10,500 – 10,000 area which was last active during the September-November 2020 period.

However, with the RSI and the Stochastics making efforts to exit the oversold territory, some recovery cannot be ruled out in the near future, though they need more convincing upside moves to signal the end of the recent sell-off, especially as the MACD is continuing to fade well below its signal and zero lines.

Should buying pressures resurface lifting the price beyond the 161.8% Fibonacci level at 21,100, buyers may get congested around the Ichimoku directional lines and the May 12^th low at 25,400. By successfully overrunning these barricades, they will likely attempt to tackle the 28,000 – 28,900 region linking the Fibonacci 50% level and the May 26^th inside low with the aim to navigate towards the May 31^st high at 32,400.

In brief, Bitcoin is expected to extend its bearish cycle in the coming sessions, with focus currently turned on the 15,000 – 14,100 area. Only a significant step beyond 21,100 will raise optimism for some improvement.