Bitcoin's recent drop to $57,000 was surprising after its sharp decline below $65,000.
With this new reality, the market must react in some way. Here are three potential scenarios if BTC breaks below the critical $57,000 level.
If Bitcoin falls below $57,000, the 200-day exponential moving average (EMA) will no longer serve as a support level. This is a key technical indicator for assessing the overall trend.
Losing this support could push BTC into bear territory and potentially intensify the sell-off. As traders and investors lose confidence in Bitcoin’s ability to maintain key support levels, this could lead to a further decline in its price.
Many buyers may try to exploit the decline and purchase BTC at the low prices around the $56,000 mark. However, if the cryptocurrency can’t hold that level, more liquidations could occur.
This could trigger additional sell orders due to buyers’ stop-loss activation, which will further lower the price. Increased selling pressure could make it harder for the Bitcoin price to stabilize, accelerating the decline.
If Bitcoin drops below $57,000, some institutional sales may halt due to lack of liquidity. This could lead to a horizontal market, with the leading cryptocurrency trading between $55,000 and $60,000 as buyers and sellers wait for more favorable conditions.
Conversely, if institutional investors continue to sell, BTC could fall to $50,000. Institutional investors, who hold a significant portion of the market, have a big influence on the price of Bitcoin. Continued selling could make it difficult for BTC to recover in the short term, potentially leading to a prolonged bear market.
Metaplanet is aggressively expanding its Bitcoin holdings through an unconventional $5.4 billion capital raise, positioning itself as a leading BTC proxy in Asia.
BlueBird Mining Ventures, a London-listed firm traditionally focused on gold, is making headlines after announcing it will liquidate its gold reserves and begin accumulating Bitcoin as a treasury asset.
Bitcoin tumbled sharply today, shedding more than 3.5% in a matter of hours and briefly flirting with the critical $100,000 level.
Bitcoin is treading water near $105,000, but pressure is building on both sides of the trade as macro forces tighten.