Bitcoin slump continues: Potential for a slide to 20k soon
The world’s most valuable cryptocurrency Bitcoin (BTC) and other cryptos are shrinking faster than Lake Mead. During the last week, Bitcoin plunged to $25,000 following the release of the latest US inflation data. The bulls have fought off an initial dip near the $25000 support, but bearish momentum persists and could continue to pressurise the cryptocurrency.
The price of Bitcoin down by more than 40% this year, and the crypto pair has been bearish since it made a new record high last November. Last week saw an estimated $USD200 billion has been wiped from the value of cryptocurrency around the world. The strong bearish momentum was caused by continuing war in eastern Europe, rising inflation, and the aggressive policy of raising interest rates by the United States Federal Reserve. U.S. inflation data out Wednesday showed prices for goods and services jumping 8.3% in April.
Recently, Cryptocurrency exchange Coinbase (NASDAQ: COIN) has reported a 44 percent fall in its overall trading volume in the first quarter of 2022. The firm’s monthly transaction users dropped to 9.2 million during the first quarter from 11.4 in Q4. The stock is down more than 70% since the beginning of the year.
BTCUSD short-term technical outlook
The volatility in the cryptocurrency market is expected to remain high in the coming weeks. Bitcoin (BTCUSD) slightly recovered from the early weekly losses in the last two trading sessions, but the overall momentum remains under pressure as the cryptocurrency pair failed to close above $30000 on the weekly close. As of this writing, the Bitcoin (BTC) trades above $30000.
In the short term, if the bearish sentiment continues $25,000 remains the key support area to watch. If this level fails to hold, the slump will quickly extend toward the $20,000 mark. On the other hand, a weekly close above the $30000 price mark brings a new potential barrier into the picture. A break this and close above this resistance level then expect the Bitcoin to zoom up to $32,600 and $34,400.