Bitcoin has continued to extend its recently incurred downwards momentum, as its price plummeted today as its bulls failed to defend its key support level at $8,000. This downwards movement has brought it down to its key near-term support level, and it currently appears to be at grave risk of breaking below this level.
Today’s drop has led one prominent Bitcoin bear to claim that the cryptocurrency is at risk of dropping as low as $1,000 in the near-term, which could be perpetuated should it break below the neckline of a head and shoulders formation that it is currently caught within.
Bitcoin Reels Into $7,000 Region as Analysts Eye Further Downside
At the time of writing, Bitcoin is trading down 6% at its current price of $7,640.
This drop marks a significant extension of the downwards pressure it has faced over the past several days and weeks, as it has failed to garner any sustainable upwards momentum with each attempt to bolster its price being met with significant selling pressure.
Importantly, this latest drop has led Bitcoin to erase nearly all of the gains it incurred during its massive rally in late-October.
Big Chonis, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, saying:
“$BTC – a month of lower highs and lower lows, and now back to where the [China] pump started… ‘and like that it was gone,’” he noted.
This firm downtrend has led analysts to grow increasingly bearish on the cryptocurrency’s near-term price action, with one outspoken Bitcoin bear and a gold advocate telling his followers that he is currently watching to see if BTC breaks below the neckline of its head and shoulders pattern, as this could lead it as low as $1,000.
Peter Schiff, a prominent gold bull and Bitcoin bear mused this possibility in a tweet, saying:
“#Bitcoin is nearing the neckline of the head-and-shoulders top I pointed out before the Oct 25th 40% pump. The right shoulder is now shrugged and the neckline slanted and parallel to the shoulders. If it breaks the price objective for the dump is $1,000 to complete the pattern.”
Although Schiff is highly biased against Bitcoin and his price target may be exaggerated, BTC is trading in precarious territory, and a failure to bounce here may open the gates to significantly further losses.