Bitcoin (BTC) appears to have slightly recovered after one of its worst crashes in 2022. The coin had fallen below $30,000 for the first time since July last year. However, it rebounded sharply in a few days. Here are the main takeaways:
BTC is currently hovering above $31,000 after a slight recovery over the last 24 hours
However, there still remains a significant downside risk that could push BTC below $30,000
Bullish RSI divergence however suggests a surge towards $34,000 could happen
Data Source: Tradingview
Bitcoin (BTC) – How the price may playout
Bitcoin (BTC) fell below $30,000 for the first time in almost 10 months. Although the coin had seen sharper falls in 2022, it had never breached $30,000. The mega-cap however recovered almost instantly and is now hovering above $31,000.
Despite this, a lot of downside risk still remains. In fact, there are fears that slow investor sentiment and an ongoing broader correction in the market could crash BTC to $20,000 before any future bull run. But momentum indicators show that there is an opportunity for short-term gains.
We expect BTC to test $34,000 based on the current RSI divergence. However, upward momentum remains severely limited. Unless something drastic happens to change sentiment, BTC will likely sell off after hitting $34,000 and may as well lose the $30,000 support once more.
Where will BTC bottom?
A lot of analysts were expecting some correction in Bitcoin this year. However, the price has fallen sharply than expected. If BTC is not able to stay above $30,000, we are going to see a huge drop in the price.
In fact, downside risks below $30,000 are so serious to a point where BTC could go into free fall once it firmly settles below $30,000. Most analysts fear the coin could bottom at $20,000 before its next run.