Bitcoin (BTC) has dropped below $8,000 and is in danger of further declines.
Sell-off pressure and absence of positive catalysts have seen bitcoin drop from a high of $10,450 in October to the current $7,911.
Elsewhere, an analyst points to probable declines that could take BTC to price levels close to $4.2k.
Bitcoin (BTC) has wiped nearly 75 percent off the price gains seen in October. Worse, the bearish sentiment continues to hold. The scenario leaves the benchmark crypto exposed to further pressure from sellers, pushing prices to test key support at $7,880.
Bitcoin (BTC) jumped from prices just above $7,290 to $10,350 in the two days between October 25 and 26. However, the current BTC price is $7,911 on the Bitcoin exchange Bitstamp. BTC/USD is down over 2.6 percent on the day and close to 24 percent down on its October peak.
Over $2.4k in gains off in three weeks
The sudden price jump that took BTC to price levels above $10k meant that total gains stood at over $3.2k.
However, Bitcoin has lost over $2.4k over the period between October 26 and November 21. Taken as a percentage, the decline adds up to a jaw-dropping 75 percent in just over three weeks.
The crypto community attributed Bitcoin’s failure to hold prices above $10,000 to the regulatory conundrum that surrounded Facebook’s Libra cryptocurrency and recently, Chiba’s renewed crackdown on crypto trading.
Incidentally, the spike that sent BTC above $10k was down to the positivity that followed China’s blockchain plans.
BTC technical indicators
Bitcoin (BTC) daily charts indicate that the top coin now relies on support at $7,880. But BTC has traded in a downtrend over much of November, meaning a further downside is in the offing.
The MACD and the RSI (14-day) all point to a bearish trend, with the former crossing below 0 and the latter below 50.
$7,880 is the 38.2% Fibonacci retracement level for the last rally from $3,122 to $13,880.
An analyst says two scenarios abound:
Bitcoin could rebound and close at prices above $8k or plunge to levels last seen in 2018. The first scenario will happen if sell-off pressure dissipates and several positive catalysts emerge. If an upside materializes, a bullish trend may resurface which couple with high trading volumes to cement an uptick in prices.
On the downside, the analyst believes, Bitcoin could test $7,200 and then $6,000. Any close below this price could see Bitcoin bottom at prices near $4.5k.