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On March 5th, Bitcoin remained hovering over crucial support levels as the weekly candle closed, causing concerns of a potential breakdown.
<source: tradingview, Binance>
The BTC/USDT pair had been trading within a narrow range over the weekend, with little movement since a sudden drop on March 3rd due to a margin call related to Silvergate Bank.
<source: Twitter>
Although Bitcoin managed to avoid further losses, analysts cautioned that if the nearby support level failed to hold, the price could still drop significantly lower.
Material Indicators, a monitoring resource, reported that Bitcoin's price action had lost an essential technical support level, and the only remaining support for bulls to hold onto was at $22,000, which was recently a resistance/support flip zone.
According to a Tweet by Material Indicators, the local R/S flip zone is the last chance for bulls to avoid a retest at the trend line. Additionally, the Trend Precognition indicator is showing a downtrend.
The charts accompanying the report showed that the BTC/USDT order book on Binance had bid liquidity at $22,000, with the trend line also at stake:
<source: Twitter>
<source: Twitter>
Michaël van de Poppe, the founder and CEO of trading firm Eight, warned that if the $21,300 support level failed to hold, the price could drop further to around $19,500, and altcoins could see a 15-25% decline.
Despite this, van de Poppe still maintained an optimistic outlook and suggested that Bitcoin could reach $40,000 in a few months. He advised investors to use the dollar-cost averaging strategy and buy even when they don't feel confident.
Research firm Santiment investigated why the market reaction to Silvergate Bank's potential bankruptcy had been so severe.
<source: santiment>
They found that there was an unusually high amount of negative commentary about the markets, with #cryptocrash trending on Twitter, even though Bitcoin had only experienced a mild 5% pullback three days prior.
Santiment suggested that this level of negativity could typically be used to capitalize on the market and that such overwhelmingly bearish sentiment could lead to a nice bounce to silence critics.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.