Bitcoin´s falls open the door to declines towards yearly lows at $33,000
By Noemi Jansana / Alejandra Zamora
Date: Friday 06 May 2022
(Sharecast News) - The sell-off that plagued the major financial markets and left all three Wall Street indixes plummeting, with the Nasdaq taking the brunt and giving up 5% on Thursday, has not left Bitcoin and cryptocurrencies indifferent, since a major descent has been unleashed, with more than $100 billion wiped out in one fell swoop. Total capitalization is now at $1.66 trillion, down from $1.77 at Thursday's European open and far from the $1.8 / $1.85 trillion mark where the market was consolidating during April. Bitcoin (BTC) has left lows since January at $35,500.
The blow for Bitcoin has been fulminant and the main cryptographic asset has experienced a plunge of more than 8% in 24 hours. Where on Wednesday and in the early hours of Thursday everything was a relief rally before a US Federal Reserve (Fed), which seemed to be at the right point of monetary tightening that the markets expected, as Thursday progressed, investors felt that the comments of the central bank chairman, Jerome Powell, "were a hoax," stated Stephen Innes, an analyst at SPI Asset Management.
"The comfort the market had after the Fed quickly evaporated," he explained. "Investors en masse seemed to decide that the central bank was still hawkish. However, they have also come to the conclusion that the Fed cannot stop runaway inflation without avoiding a hard landing or an economic black hole," the expert commented.
For Bitcoin, this has meant a sharp decline from resistance at $40,000. BTC broke through key support at $37,500 and the 100-hour moving average to move into a bearish zone.
It eventually tested the $35,500 area and traded as low as $35,407. It is now consolidating losses near the $36,200 level. On the upside, the Bitcoin price is now facing resistance near the $36,500 level.
Technical analysis indicates that the 23.6% retracement level of the downward move from the high of $40,029 to the low of $35,407 is also near the $36,500 area. The next key resistance could be near the recent breakout zone at $37,500, where bears could take a position. Should it lose $35,000, Bitcoin will face support at $33,000 and lows for the year, reached on January 24th.
A CRASH IN ALTCOINS
The rest of the market leaves a bleak picture. Ethereum started a significant decline from the $2,970 area and the price is now below $2,800 and the 100-hour simple moving average. It finally bottomed below the $2,720 support level at $2,680, from where it has bounced to prices around $2,750.
The price even broke above the 23.6% retracement level of the recent decline from the high of $2,969 to the low of $2,678.
On the upside, initial resistance is seen near the $2,760 level. The first major resistance is near the $2,820 level. It is near the 50% retracement level of the recent decline from the $2,969 swing high to the $2,678 low. The main breakout zone is now near the $2,875 level.
Other tokens such as Solanna, Cardano, Avalanche or Ripple, which left significant rallies after the Fed, are now giving up as much as 15% in some cases. The meme tokens, Dogecoin and Shiba Inu, are holding up a little better, with falls of between 5% and 7%.
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