Bitcoin extends its losses and threatens yearly lows as its price targets $32,000
By Noemi Jansana / Alejandra Zamora
Date: Monday 09 May 2022
(Sharecast News) - The cryptocurrency market extended its bearish tone over the weekend and all tokens continued to experience sales to the point that the market capitalization fell to $1.54 trillion, the lowest seen since January 24th. The risk aversion that has plagued the main financial markets has hit cryptocurrencies hard, with Ethereum, Cardano, Solanna and Avalanche leading the falls on Monday. Bitcoin, meanwhile, is threatening yearly lows at $33,000.
Expectations of an aggressive interest rate hike continue to weigh on cryptocurrencies. Sluggish economic growth is also denting sentiments toward digital tokens.
The most traded coin in the market has seen its value fall to $640 billion as the price gives up more than 13% in the last week alone. The year-to-date correction is 27% and bearish traders are now threatening the $33,000, annual lows of January and targeting price levels around $32,000.
This decline has accelerated since Friday, when Bitcoin began a sharp descent below the $36,500 and $35,500 levels. Now the price is trading below $35,000 and the 100-hour simple moving average. It is currently consolidating losses and showing bearish signals below $34,000, where a bearish trend line with resistance is seen near this price level.
The next important support is near the $33,500 level. A downside break of this control zone could trigger another sharp decline. The next important support could be $32,500. Further losses could see the price head towards the $32,000 support zone.
As for resistances, the $35,500 and $36,500 levels are the areas to overcome in the short term. However, technical analysts indicate that the price should regain the $38,000 level to start building rising lows.
As for Ethereum, the outlook is equally bleak. The formation of a symmetrical triangle on the three-day chart of Ether-the Ethereum network unit-suggests that a break of the $2,500 support level, which is undergoing an assault on Monday, could lead to a 64.7% drop. A break of the 78.6% Fibonacci retracement level at $2,150 could be the first sign of confirmation of the bearish outlook. Ethereum could hover around $1,720 before a capitulation near the $900 level.
Current technical conditions suggest that Bitcoin and Ethereum are headed for steep corrections. However, given the high volatility of the cryptocurrency market, the bearish thesis could be invalidated. Ether would have to break above the $3,270 resistance level to stage a bullish breakout.
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