Key Bitcoin Takeaways
- Bitcoin plunged by almost 5.5 percent on Monday after setting up a record high in the previous session.
- The one-day drop is the largest since February 10, pointing to extended intraday declines as the European session matures.
- Long-term sentiment remains bullish on growing corporate adoption against the US dollar depreciation.
The flagship cryptocurrency was down by up to 5.5 percent after the London opening bell, flirting with short-term technical support near $55,550 for an extended bearish breakout move. In doing so, BTC/USD targets the $52,000-54,000 as its next downside target.
Looking from a broader perspective, the pair appeared to have been testing an upward sloping trendline that acts as a price floor to a Rising Wedge pattern. Technically, a break lower risks sending the Bitcoin price lower by as much as the Wedge’s maximum height (which is about $10,000-long).
That puts the cryptocurrency on a corrective course to $45,000—about 20 percent lower from the latest peak.
Bitcoin's Rising Wedge pattern points to a 20 percent correction ahead. Source: BTCUSD on TradingView.com
…rising wedges have failed previously while determining Bitcoin’s short-term bias.
There is a massive possibility that Bitcoin locates a support area above $50,000 before it resumes its upward momentum. The reason remains its corporate/institutional adoption against the long-term risks brought by inflation and fiat depreciation.