In recent days, we have regularly talked about the fact that the upward trend is weakening. This was clearly visible in the general trend and in each subsequent price peak that was at a smaller distance from the previous ones. Also, what supports a strong correction of bitcoin is the fact that the cryptocurrency has already broken all price records, and has been rising in price for more than a year now. And for this year, there were few strong corrections. Thus, no asset in the world can become more expensive all the time. In recent days, it has been noticeable that the influx of new investors has dried up, and some rather negative news for the cryptocurrency world has only made the situation worse. First came news of accidents at coal mines in Xinjiang, China, which is the region where the largest amount of mining capacity is concentrated. Then, it became known that the US Treasury is going to fine several serious financial institutions for possible money laundering with the use of bitcoin. And then, bitcoin was hit by a massive sell-off.
At first, there was only a round of correction to the support level of $50,770. Now, after two days of pause, although not an upward correction, bitcoin quotes again rushed down. It will be possible to signal about overcoming the support level of $50,770 only at the end of the day, that is, for example, tomorrow. If this overcoming happens, the chances of a further fall in the cryptocurrency will increase significantly. Although, we believe that the decline will continue in any case. Just the other day, we compared the last two ups of the bitcoin exchange rate in 2013 and 2017 and concluded that the current growth is very similar to those two. And in the first two times, always after a rapid growth, a slower decline began, which led to a loss of 80-90% of the value. We believe that approximately the same thing can happen now, but not in 1-2 weeks. Perhaps, it will take at least a year to fall to 10-20 thousand dollars per coin.
Meanwhile, Guggenheim Partners investment director Scott Minerd warned that the correction for bitcoin can be up to 50% of the current value, which means that the quotes, in his opinion, can fall in the range of $20,000 – $30,000 per coin. He said this in an interview with CNBC, not forgetting to add that bitcoin has grown very much in too short a period of time. According to him, the market at this time is very "playful" and grows only on emotions. "I think we could pull back to $20,000 to $30,000 on bitcoin, which would be a 50% decline, but the interesting thing about bitcoin is we've seen these kinds of declines before," Minerd said. In his opinion, in the future, the price will continue to rise, and the fair price of bitcoin may be $400,000 - 600,000.
In technical terms, bitcoin continues to be below the critical line and in the near future may gain a foothold below the Senkou Span B line. Now, it is already clear that the support level of $50,770 will be overcome, and most likely, the Senkou Span B line, too. Ergo, the chances of a further decline in bitcoin in the area of $43,850 are growing. Now, it is time to talk not just about a downward correction, but about a new long-term downward trend.