Where does the bleeding stop?
Technicals and psychology are the two main things when it comes to trading cryptocurrencies. And currently, both are flashing warning signs of a potential major downfall in Bitcoin. The $5,000 level acts as a major psychological support and with it giving way rather easily, the risk to the downside looks set to intensify.
All this comes after yesterday's downside move breaks below the November 2017 low and the close below the $5,000 level only adds more insult to injury.
Bitcoin is now treading lows close to $4,500 levels currently as other cryptocurrencies are also falling across the board so far today. Sentiment is not looking good right now and it could get even uglier from here for cryptos in general as the spillover effect to altcoins can be rather significant.
From a technical perspective, price is currently testing support from the downwards trendline around $4,600. But beyond that, it is sure one ugly looking chart after the months of consolidation since March this year. The September 2017 low @ $2,975 looks to be a realistic proposition at this point as fundamentals are continuing to fail to drive cryptos higher over the past year.
And with the euphoria surrounding cryptocurrencies continuing to fade, it's no coincidence that price is failing to match the potential that the coins could offer. A simple way to identify this is to look at Google trends search in my view. And when this happens:
It highlights the relative waning "demand" that goes into keeping prices propped up.
