As Bitcoin’s price falls below $7,000 for the first time in over a month, many are wondering if the bears have finally taken control. While it’s still too early to say for certain, there are a few factors that suggest the market may be heading for a prolonged period of decline.
The most obvious factor is the recent break of key support levels. For much of 2018, $6,000 served as a floor for Bitcoin’s price, but that level was decisively breached last week.
Since then, the $6,000-$7,000 range has also been broken, with prices dipping as low as $6,200 on some exchanges.
Another bearish sign is the increasing number of large sell orders being placed on exchanges. These orders are often placed by whales (individuals or groUPS holding large amounts of cryptocurrency) who are looking to unload their holdings at advantageous prices.
The presence of more whales selling is often considered a sign that the market is about to enter a period of extended decline. This is especially true when combined with the loss of key support levels, as it suggests that even those who are normally bullish on Bitcoin are now turning bearish.
Of course, it’s important to remember that the cryptocurrency markets are notoriously volatile and unpredictable. Even if the bears do take control in the short-term, there’s no guarantee that prices will continue to fall.
A sudden influx of buying pressure could easily lead to a sharp rally, invalidating all of the bearish signs mentioned above.
For now, however, it seems likely that Bitcoin is in for a period of sustained decline. Prices may fluctuate in the short-term, but it’s increasingly likely that any rallies will be short-lived and followed by further drops.
Those who are bullish on Bitcoin may want to consider waiting for more favorable conditions before buying back in.