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If Bitcoin (BTC) Drops Below $57,000, These 3 Things Would Happen By U.Today
U.Today’s collapse towards $57,000 was the last thing anyone expected after the catastrophic drop below $65,000. However, it has become a reality and the market will have to act one way or another. Here are three potential outcomes if Bitcoin were to drop below the crucial $57,000 level.
200 EMA is invalidated as support
The 200 EMA will no longer be valid as a support level if Bitcoin falls below $57,000. The 200 EMA acted as a key technical indicator to evaluate the overall trend. If Bitcoin were to lose this support, it would enter bearish territory and could even worsen the sell-off. As traders and investors lose confidence in Bitcoin’s ability to hold above crucial support levels, this could lead to a further decline in its price.
Many buyers may try to take the knife and purchase Bitcoin at what they perceive as a low price around $56,000. However, there could be more liquidations if Bitcoin is unable to maintain this level. An additional sell order can be executed following the triggering of buyers’ stop loss orders, further lowering the price. It may be more difficult for the price of Bitcoin to stabilize if there is greater selling pressure, which would accelerate the decline.
Possible sale and stall
Due to the lack of liquidity, some institutional selling could end if Bitcoin falls below $57,000. As buyers and sellers await more favorable conditions, this scenario could lead to a sideways market, where Bitcoin trades between $55,000 and $60,000. On the other hand, Bitcoin could fall to $50,000 if institutions continue to sell.
The price of Bitcoin is heavily influenced by the actions of institutional investors, who hold a substantial share of the market. It may be difficult for Bitcoin to recover in the short term if the sell-off continues, as this could lead to an extended bear market.