Bitcoin crashes to $56K briefly, panic selling rampant?

Bitcoin crashes again! The token fell from $58K price levels to $56K, dropping in single digits. The drop in the prices came after the prices tried to regain the support at $60.7K. However, the bulls were unable to do so. 

The data from CoinMarketCap shows that as of 6:02 PM GMT, the trading volume of the king of cryptocurrencies, Bitcoin, stands at $33.6 billion, indicating a 29% increase. On the other hand, the market capitalization of BTC dropped by 3%, to 1.08 trillion USD. 

The market dominance of Bitcoin dropped to 42%, while altcoins also followed a similar trend. The BTC/USD pair was following an uptrend since October but, prices turned bearish after Nov 9. However, whales are buying the dip as TheCoinRise reported. 

The prices today opened at $58.6K, followed by a daily high of $59.4K. Bears took over, and the prices dropped to a daily low of $56.5K. The important resistance levels include 59538.23 USD, 60345.97 USD, and 60794.23 USD. The important support levels include 58282.23 USD, 57833.97 USD, and 57026.23 USD.

Bitcoin price analysis on the daily chart

The Bitcoin price analysis on the daily chart by TradingView shows mixed sentiment in the market. The 50-day Moving Average continues to progress above price fractal, which is a bearish scenario in the short term. However, the 100-day Moving Average is below the price action, which is optimistic for the long-term holders.

A few days ago, the prices failed to break out from the upper end of the Bollinger Bands, falling to the lower end of the Bands and is currently situated there. We might see a breakout if the current support levels fail in their task.

Bitcoin price chart by TradingView

The RSI levels are reaching towards lower zones as the gradient is negative. This means that the selling pressure is defeating the buying pressure and lower prices in the short term are possible.

The MACD indicator shows that the signal line (orange) is above the MACD line (blue), and a continuation of the trend will strengthen this bearish movement. The MACD histogram is also bearish, filled with red bars.

Bitcoin price chart by TradingView

The OBV line indicates that buyers are not willing to step up and push the prices higher, or sellers have increased in strength. Currently, the selling volume is outpacing buying volume.

The Accumulation/Distribution line is trending up in the long term with a slightly negative gradient. Earlier, the CoinRise covered that a large number of investors have accumulated Bitcoin and are not willing to sell them.

Bitcoin price chart by TradingView

On the whole, this is a good time to buy Bitcoin and hold them for the future. As inflation is increasing, holding a BTC is one of the best investment decisions you can make. Another factor in Bitcoin’s growth is the Taproot upgrade that happened a few days ago and was covered by TheCoinRise.