Tuesday, 11 May 2021 04:52 GMT

BTC/USD Forex Signal: Bitcoin Could Drop to $50K

(MENAFN - Daily Forex) Bearish View

  • Set a sell-stop at 53,000 and a take-profit at 50,000.

  • Add a stop-loss at 54,000

  • Timeline: 1 day.

Bullish View
  • Set a buy-stop at 56,000 and a take-profit at 58,000.

  • Add a stop-loss at 54,000.

The BTC/USD price flash crash intensified in the overnight session. The Bitcoin price declined to $53,645, which was the lowest level since Sunday. Its market capitalization is still above $1 trillion while the currency has risen by more than 80% year-to-date. Other altcoins like ETH, Cardano, and Ripple also slumped by double digits.


Buy the Rumor, Sell the News

Last week, Bitcoin and other cryptocurrencies rallied to all-time highs as the market cheered the first major crypto-linked listing. Coinbase went public through a direct listing, becoming the first company in its industry to do so. At its peak, the firm was valued at almost $100 billion. It is valued at more than $65 billion today.

Therefore, the recent Bitcoin price sell-off is mostly because investors are fading the news. This is known as buying the rumor and selling the news and is a popular strategy when trading major events. Therefore, the market is attempting to find another catalyst.

There are also concerns about regulations. While most countries allow trading and ownership of the currencies, others have started to put regulations in place. In India, the government is considering placing restrictions on trading and ownership of the currencies. This would have an immediate impact on Bitcoin price because of the size of the Indian crypto community.

On Friday, Turkey became the latest country to place restrictions on the currencies. In a statement, CBRT said that it would ban them as a means of payments on April 30. Therefore, there is a possibility that more countries will start to adopt these regulations as volatility intensifies.

The BTC/USD price declined even as the US dollar sell-off intensified. The dollar declined by more than 0.60% yesterday and is trading at the lowest level in weeks. Also, it fell even after a major power outage in China that affected mining capacity.

BTC/USD Technical Forecast

The daily chart shows that the BTC/USD has declined in the past five consecutive days. Before this sell-off, the pair made a rising wedge pattern that is shown in red. The pair has also moved below the 25-day and 15-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has continued dropping.

Therefore, the pair may keep falling as bears target the next key support at 52,000. This will happen as more holders start exiting. At the same time, there is a possibility that more buyers will start buying the dips.



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