Bitcoin has recently dropped to $65,000, surprising many after a significant drop below $57,000. In this new reality, the market must react in some way. If BTC falls below the critical level of $57,000, here are three possible scenarios.
200 EMA support failure
If Bitcoin falls below $57,000, the 200-day Exponential Moving Average (EMA) will no longer act as a support level. This is a key technical indicator for assessing the overall trend. Losing this support could push Bitcoin into bearish territory and potentially exacerbate selling. As traders and investors lose confidence in Bitcoin’s ability to hold key support levels, this could lead to further price declines.
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Clearing growth
Many buyers may attempt to take advantage of the decline to buy BTC around $56,000. However, if the cryptocurrency cannot maintain this level, more liquidation may occur. This could trigger additional sell orders and further pressure prices as buyer stop-losses are activated. Increased selling pressure could make it more difficult for Bitcoin’s price to stabilize, accelerating the decline.
Potential sales and market stalemate
If Bitcoin falls below $57,000, some institutions may stop selling due to a lack of liquidity. This could lead to a sideways market, with leading cryptocurrency trading prices between $55,000 and $60,000 as buyers and sellers wait for more favorable conditions. Conversely, if institutional investors continue to sell, BTC could drop to $50,000. Institutional investors hold a significant market share and have a major influence on Bitcoin’s price. Continued selling could make it difficult for Bitcoin to recover in the short term, potentially leading to a long-term bear market.
