19.05.202212:54 Forex Analysis & Reviews: Bitcoin Can Update Local Bottom At $8k: How Possible?

The sharp deterioration of the situation in the Bitcoin bear market and a further decline to $24k have intensified talks about the collapse of cryptocurrencies. Many experts began to measure forecasts about a possible decline in Bitcoin to $20k, $14k, or even $8k. The main thesis of any review is the tightening of monetary policy and the bear market that has just begun in the digital asset market. However, in fact, such a sharp price reduction is unlikely to occur, taking into account several important factors.

The main supporter of the fall of Bitcoin to $8k is Peter Schiff. The analyst's arguments are a combination of several fundamental figures that indicate the fall of BTC/USD to $8k. Schiff believes that the price of Bitcoin has broken through the vital $28k level, where the final support line lies. In addition, the investor drew attention to the formation of the "Head and Shoulders" pattern on the daily timeframe of the cryptocurrency. Now the next target of the asset should be the $8k zone, where the lower limit of the wide range passes.

It is important to understand that Bitcoin has not made a bearish breakdown of the $28k mark. As of May 19, the main cryptocurrency is trading around $29k, and the local decline to $24k was impulsive, after which the asset recovered to $28k and higher. Therefore, a decline in the $28k–$24k zone should be perceived as a false breakdown. The relevance of this support area is still maintained.

The probability of a decrease in the price of the cryptocurrency really exists. Market sentiment remains bearish, the Fed's policy continues to have a negative impact on the investment preferences of the market, and major players are skillfully taking advantage of the current situation. The current drop in price is mainly caused by a sharp jump in volatility due to the constant beating of "weak hands." This provokes cascades of sales and the price begins a sharper and deeper decline. However, these actions should not be taken as an attempt to bring down the BTC rate to $8k.

The price of Bitcoin continues to trade within the $29k–$29.8k mirror support level. At the current stage, there is consolidation within a narrow range with gradual accumulation. The volumes of long positions make us think that the asset will soon make a bullish breakout of the mirror level and move towards $32k–$35k. If a miracle does not happen here and the price does not move to the $35k–$38k range, the asset will again begin to decline to the $28k–$29k range with another attempt to hit the $25k level. This variant of events is considered the next series of "refueling" of large investors.

The market is stabilizing after a tough week with $3 billion in liquidations. With this in mind, most likely the consolidation will last for several days, after which the price will begin to work out the implementation of the long idea to $32k–$35k. However, later it is worth waiting for another fall with increased volatility. As for the likely decline, the current potential in the $20k region should be considered as the implementation of the bear flag pattern. This suggests that the $20k–$32k range will become an active trading area in the near future.