BTC: 5 Indicators suggesting Bitcoin could drop further below $4,000

Analysts predict the Bitcoin could plunge further in the coming weeks. Technical analysis combined with the current COVID-19 pandemic situation suggests that the BTC's fall below $4,000 won't be much of a surprise.

BTCUSD Outlook:

  • Short term: Bearish
  • Medium to long term: Strongly Bearish

Most Bitcoin traders faced a rough week. Amidst uncertainty and rising fear in Financial markets worldwide, the BTC has struggled to keep up with the price it featured initially in the week. It is currently at a phase that analysts call the Bearish consolidation phase

 

Here are the five indicators that point towards plunging BTCUSD prices:

  1. Bear Flag formation: A significant drop in prices followed by a small rise and entering a consolidation phase, thereby forming a Bearish Flag. Now according to the Bearish flag, the BTC could drop all the way to $3,450.
  2. Death Cross: Death cross occurs when the 50 DMA moves below the 200 DMA, and this happened to the Bitcoin on March 26. Another Bearish indicator for the long term.
  3. Moving average acting as resistance: The 200 DMA starts acting as a resistance level after forming the Death Cross. The Bitcoin faces strong resistance at $6,900. Breaking this resistance seems unlikely considering the current massive sell-off.
  4. Fibonacci retracement levels: The Fibonacci 0.5 or 50% Bearish resistance level lies at $6,542. BTCUSD is currently hovering at around $6,540, and this resistance level could be crucial.
  5. World economy entering a global recession: The IMF announced on Friday that the world economy is entering a global recession. Dow Futures are down more than 3%. And Bitcoin is connected not only to the US but the global economy as well. Investors fleeing safe assets such as Gold is evidence enough that people are worried about losing their capital.

 

The coming weeks will be testing times for the cryptocurrency. The cloud over COVID-19 needs to remove for things to stabilize in the Financial markets.

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