After highs of nearly $5500, the latest bitcoin price action has seen a sharp drop overnight of 10% to a new low of just above $5000. This dramatic correction now puts bitcoin’s price at a crossroads – investors are wondering if the $5000 support level will hold, or if it will sink further below into the $4000 range.
Bitcoin price action over the previous week
The previous week was the largest positive climb for bitcoin’s price since last year. The sharp climb from $4200 to around $5000 saw an almost 20% increase in price during a single day, all due to a mysterious buyer purchasing $100,000,000 worth of bitcoin on 3 key exchanges – Coinbase, Kraken, and Bitstamp – during the course of only an hour. In total over 20,000 bitcoin were purchased.
This steep bitcoin price move was seen as the coming of the next bull market by many, but some wondered whether as this movement was due to a single investor as opposed to natural price action, whether the new price would hold, or plummet back to its original value of around $4200, as it usually would if it were any other given altcoin.
The deciding factor for many on what the price would do was the fact that the price continued to rise long after the original price move. From $5000, over the course of a week from April 2nd to April 19th bitcoin’s price rose consistently to heights of $5300 on April 3rd, before a sharp retrace back to $4800, and then up to a yearly all time high of nearly $5500 yesterday on April 10th.
This strong and consistent price action was seen as being indicative that bitcoin’s price would rise further and further, and this indeed was the start of the next bull market.
What people are thinking of bitcoin’s price decline
Investors, traders, and experts alike are all now wondering whether this correction will signal a dump back to previous levels, or whether this itself is a natural retrace to a support level before another consistent growth phase of a few days or more.
If bitcoin’s price falls below $5000 over the next day or two, then there’s a strong chance of a further drop in value over the coming days (or even weeks). However, if bitcoin can stay above the $5000 level and hold the support lines, then there’s a strong chance that this is confirmation that the sharp overnight decline was a natural retrace, and there will be more positive price action in the near future.
All eyes will be on bitcoin’s price over the next 24 hours to see what the cryptocurrency leader will do. As of yet, the outlook is unclear.
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