Source: Jaruwan Jaiyangyuen – Shutterstock
- The Bitcoin price has fallen below the $53,000 support and may now test the region between $49,000 and $51,200
- Tomorrow, Friday, $6 billion in Bitcoin options contracts expire.
After the crypto market experienced a strong push up to $57,200 yesterday due to the news of Tesla’s adoption of Bitcoin as a means of payment, this effect has already fizzled out again in the course of the same day. Bitcoin has even fallen below the price level it had before the Tesla news. At the time of writing, BTC was trading at $52,800, down 6.2% over the past 24 hours. The total market capitalization fell by almost 5% and now stands at just $1.65 trillion.
Yesterday’s crash was accompanied by a sharp increase in trading volume (by 26%), indicating that traders withdrew their funds to avoid further losses. Remarkably, the downturn once again coincided with a speech by FED chief Jerome Powell to the Senate Banking Committee.
Both traditional stock market and Bitcoin investors were concerned that rising bond yields were an indicator of rising inflation and potentially rising interest rates. However, Powell reiterated his stance that the FED would not intervene. Nevertheless, the S&P500, Nasdaq and Bitcoin reacted with a downturn. The supposed reason could be the reallocation of assets by investors from speculative assets like Bitcoin and tech stocks to safer assets.
Will tomorrow turn into D-Day?
Chart analysts see the renewed crash as another retest of support. Dutch trader Michaël van de Poppe stated that bitcoin has entered the next support zone after failing at $56,500 and losing $53,000, a critical support:
I’m looking at this region between $49-51.2K for confirmation, but buying the dips on some #altcoins is great.
Analyst Scott Melker aka “The Wolf of All Streets” pointed out the potential bullish divergence in the RSI on every time frame up to the 6-hour chart. On some charts, the RSI is also signaling oversold territory, Melker noted. Still, he advised caution:
Need a definitive “elbow up” on RSI to confirm. Increased volume on the sell off, so hard to get excited yet.
Meanwhile, tomorrow, Friday, could be a decision day for Bitcoin. As Glassnode co-founder Yann Allemann noted via Twitter, $6 billion in options contracts expire tomorrow. Once the notoriously bad month of March for Bitcoin – due to “tax season” in the U.S. – is over, there could be a bump up. At the very least, options traders’ price expectations are “high.” Many investors are betting on a BTC price of $80,000.
— Jan & Yann (@Negentropic_) March 24, 2021