Bitcoin Plunges to $56K Due to Weakening Trading Volume

As Bitcoin has been hovering around $60,000 for a long time, the bulls have not seen a strong breakthrough at this important pressure level. Investors are taking a wait-and-see attitude towards Bitcoin spot investment. They are shifting their own capital to the altcoin market, which can bring even greater gains. 

Bitcoin (BTC) has fallen by 2.44% in the past 24 hours and by 4.37% within a seven-day period. At today's lowest, Bitcoin was trading at around $55,441.93.

Bitcoin's price is currently slightly rebounding. At the time of writing, Bitcoin is trading at $56,498.81.

Source：data.bitcoinity

Bitcoin spot trading volume has been in a low-frequency trading stage since April 2021, which prompted Bitcoin to drop to nearly $56,000. As a result, the Bitcoin spot market has been in a weak state.

Bitcoin (BTC) Price Analysis

Source：BTC/USD Daily via TradingView

Bitcoin (BTC) failed to break the rigid resistance of $60,000, attracting many short-term momentum traders to sell profits. This pulled the price back below today's 20-day Exponential Moving Average (20-EMA) of $56,771.

Bitcoin, the largest market-cap cryptocurrency, is looking for price support around a 50-day Exponential Moving Average (50-EMA) of $53,275 and resistance around $60,000.

As the price of Bitcoin rises, more funds are needed to maintain this level. Therefore, if the inflow of institutional funds does not increase in the next few days, Bitcoin (BTC) may undergo a major adjustment, and it is very likely to test the 50-EMA support level.

If the bears manage to maintain the price below the 50-day Exponential Moving Average, it will trigger more intensified selling orders. The next support level to look out for if Bitcoin fails to flip $53,275 into a support level will be near $51,326.

The flat moving average and the MACD index have formed a bearish crossover, showing that bears are currently dominating the market.

If more investors buy the dips, this may serve to push Bitcoin's price above the 20-EMA. This will result in Bitcoin resuming an uptrend, as it aims for the 60K psychological level. If 60K is breached, bulls will begin eyeing $70,000.

Image source: Shutterstock