The beginning of May has seen a continuation of weakness in the crypto and equity markets and at the moment there is no indication of any short-term factors that could reverse the downtrend.
Stock markets are also trending down and, according to researcher Clara Medalie, the price of stocks of companies with exposure to Bitcoin have also taken a notable hit.
“Block, Tesla, Microstrategy and Coinbase are down 20-50%.”
Data from Cointelegraph Markets Pro and TradingView shows that a morning attempt by Bitcoin (BTC) bulls to break above $39,000 was easily defended by bears, resulting in a pullback to the $38,200 level. .
Here is a look at what various analysts are saying about the current price action and what lower levels to watch for further decline.
More downside until the 200 EMA flips to support
According to independent market analyst Rekt Capital, looking at for a close above the 200-day exponential moving average is an easy way to gauge Bitcoin’s current weakness. The analyst described the metric as an “indicator of long-term investor sentiment towards Bitcoin.”
“Since mid-2021, BTC has been unable to hold above the black 200 day EMA for too long. Every time BTC broke above the EMA, it quickly lost it as support and pulled back lower.”
$28,000 could be the macro fund
Addressing what could happen next for BTC price, cryptocurrency trader and pseudonymous Twitter user ‘Cantering Clark’ posted the following chart highlighting the similarities between current price action and BTC price action in July 2021.
Cantering Clark said,
“Similar pattern of sell-offs followed by weak attempts to move higher as we saw in July 2021, again after a long-term sideways range took shape and the lows began to be favored. Possible cheat setup.
Veteran trader Peter Brandt also shared a similar sentiment, noting that Bitcoin price could drop to new lows if the current “bearish channel” develops.
“Completion of a bear channel usually results in a decline equal to the width of the channel or in this case a hard test of $32,000 or so – my guess is $28,000.”
Related: Bitcoin ‘bear market’ may drive BTC price to $25K, says stock trader due to capitulation
Long-term accumulation continues
Despite the current downtrend, data from Glassnode suggests that BTC accumulation continues to rise, a fact highlighted by the ‘Negentropic’ Twitter account.
“Panic short-holders realized losses while the long-term holder’s net change in position increased.”
The total cryptocurrency market capitalization is now $1.72 trillion and the dominance rate of Bitcoin is 42.5%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.