Bitcoin has been hanging on by thread to the $6,000 pivot level over the past few months. It has tested this key level four times since February and each time has created lower highs. This is a bearish trend which will likely result in lower prices if it continues.
As you can see in the daily chart above, prices have been basing out at $6k. However, as lower highs keep forming, it will mount pressure to break down through $6k and if that happens we could be looking at a flush down to $5k and possibly even $4k if investors start jumping ship.
The key will be volume so if we do see a breakdown watch for volume levels and volatility to pick up significantly. This will confirm the breakdown and the likelihood of lower prices. If you’ve been waiting to buy Bitcoin then a selloff below $5k could be a good opportunity to pick some up.
Bitcoin has retraced significantly from highs back in December at $20k as FOMO set in and ballooned prices. Even though prices have somewhat stabled off, the popular cryptocurrency is still subject to political risk across the globe and should be treated as a risky investment.