Analysis: Bitcoin Price Dropped 10% in a Few Hours, What Now?

Bitcoin has had a rough few days. After Bitcoin reached its highest price in a year, the coin fell 10% in just a few hours. Since then the currency seems to have recovered, but is this true? Let’s look at the graphs.

How is Bitcoin doing?

We’ll start this analysis with the daily chart, where each candle represents 24 hours. This way we can properly analyze the movements of the past few days. As you can see, below you will see a number of price levels that are important when determining the price. What do you mean?

Out of the $37,500 zone. This level was a key resistance before Bitcoin rose to $45,000. For many investors, it was a good place to capitalize on last year’s gains. But as buyers bought higher and higher, the horizontal zone broke and the path to the upside became clear.

What happened?

The coin managed to reach the $45,000 mark in a very short time, the location of the next resistance. This zone was created a long time ago (early 2021) when the price of Bitcoin fell sharply out of nowhere. This made it likely that this location would once again be a good place for investors to secure profits.

The coin actually fell from that level, but since then it seems to be hitting higher and higher lows. It would have been nice if Bitcoin continued to break out of this zone after reaching a one-year high, but unfortunately the coin encountered a lot of resistance.

The result was a rapid 10% decline that disrupted the entire market. When Bitcoin lost “only” a tenth of its value, some altcoins lost 20% or more. It’s not the worst accident we’ve ever seen, but it did cause some panic.

Here’s what we can expect

There’s no guarantee, but it looks like the decline is over for now. The currency has not yet reached a deeper low. We can also see this clearly on the 4-hour chart, where each candle represents 4 hours. It would be good if Bitcoin rose again from here.

If that happens, we could likely see a price above the recent $45,900 soon. Bitcoin would then – after a higher high – also reach a higher low. This is the formula for a new uptrend.

So we still don’t have to assume the worst, because if things continue like this, Bitcoin will still be able to recover very well. This will change when BTC makes its first lower low. In this case, a bearish scenario could occur where the coin is likely to fall towards the red line or lower green zone. Nothing will happen until then, but it is good to have clarity about these scenarios and price levels in advance.