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Investing.com – The finally broke sharply below the major psychological threshold of $20,000 overnight Friday into Saturday, dropping from around $20,300 to a low of $19,032 in less than an hour between 8:30 and 9:30 a.m. BTC/USD then accelerated its fall again around 10:15 a.m., with a low at $18,700 for now.
For now, the reasons for this sharp drop remain unclear, but it should be remembered that the reduced liquidity conditions of the weekend sometimes exaggerate the movements.
It will also be recalled that many topics weighed on Bitcoin last week, with several central bank rate hikes, the Celsius Network affair which once again shook confidence in cryptos, and the setbacks of the Singaporean crypto fund. Three Arrow Capital faces market rout.
From a technical point of view, it should be noted that the break below the $20,000 threshold is particularly significant. Indeed, this zone is all the more important as it corresponds to the peak of December 2017 ($19,890).
Moreover, the break above this zone in December 2020 was the trigger for Bitcoin’s first “mainstream” rally, which brought it almost in a straight line to $60,000.
In the short term, the $18,000 area could play a role of support, but the Bitcoin weekly chart does not point to any concrete supports before the June 2019 peak at $13,765.
Finally, it should be noted that the fall of Bitcoin has repercussions on the entire cryptocurrency market. Ethereum, for example, fell back below the key threshold of $1,000, currently at $995. ETH has also posted the largest drop in the top 20 crypto over the past 7 days, with a decline of 40%.
Ethereum’s long-term chart suggests next support at the May 2018 peak at $850.