20.04.202116:56 Forex Analysis & Reviews: BTC/USD. How long will the bearish trend last?

After the remarkable listing of Coinbase shares on the NASDAQ platform, the cryptocurrency was covered by a wave of correction. The negative news background worsened the situation and provoked a reduction in the capitalization of the crypto asset market by 6.2% over the past day alone. Bitcoin indicators sank by another 4% and continue their downward movement.

Last week, the first cryptocurrency again updated its all-time high, reaching a value of $64,900. After that, the asset was overwhelmed by a wave of price correction, which provoked a drop in bitcoin indicators by 13%. This led to the forced liquidation of long positions of users of crypto exchanges for a total of $9 billion. Today, the asset continued its downward movement, fell by 4%, and retains all the prerequisites to fall below $50,000.

As of 10:00 UTC, the quotes of the BTC/USD pair sank by 2%, and the dynamics of price changes over the past seven days became negative (-8%). At the same time, daily trading volumes also continue to decline and amount to only $69 billion. The cryptocurrency is quoted at the level of $55,000, and the asset has more chances to become cheaper. To maintain safe positions, bitcoin needs to overcome the mark of $56,000, which can become too much for the asset. This is because a large number of sell orders are focused on this threshold, and if BTC tries to overcome this threshold, it may begin to fall to $55,000 due to strong pressure.

If the cryptocurrency can gain a foothold above $56,000, then there are all the prerequisites for changing the bearish trend that the asset has been dominating for several days. Less likely, but no less dangerous, is the prospect that bitcoin will fall to $50,000 and will not be able to gain a foothold at this mark. In this case, the cryptocurrency is waiting for a painful reduction to $45,000, which will also hit the market as a whole. Another reason for the sharp drop in bitcoin prices was a surge in the activity of bears on the NYDIG platform, which, against the background of a 14% drop in the price of BTC/USD, began to increase their positions in the market. On April 20, buyers continued to put pressure on the currency to reduce its indicators to local lows. Given the difference in the value of the asset on Coinbase and Binance, we can conclude that the main pressure is carried out by holders from Asia and the platforms support this trend.

The fashion for regulating crypto assets in different countries also adds to the negativity. For example, South Korea has tightened its fight against illegal transactions with digital coins. The news about power outages in China does not add optimism. Due to the falling hash rate caused by electricity problems, the average commission on the bitcoin network has surpassed the $60 mark, which is the highest since 2017. All this affected the speed and quality of transactions on the network and also caused a negative reaction among the participants of crypto exchanges. More pleasant news was announced by representatives of the OKEx platform, where they introduced solutions of the second level of the Lighting Network to increase the speed of transactions and reduce commissions in the Bitcoin network. So far, this announcement pales in the face of more obvious problems with the BTC network in China.

Given the current market situation, institutional sentiment, and the news background, we can conclude that Bitcoin is in a transitional stage. In the next few days, the asset may significantly drop to $45,000, but at the same time, there is every chance to stay in safe positions, above $57,000. However, the current activity of bears and the systematic pressure on the cryptocurrency indicate a continuation of the downward movement. At the same time, the correction is not intended to change the current market trend but rather is aimed at its recovery and further development.