After failing to garner enough purchasing volume to generate a significant bounce, Bitcoin has been hovering around its ascending support line since mid-April. Its recent performance verified this, as it finally broke past the support line for the first time this year.
Since January 2021, Bitcoin has been trading in an ascending support and resistance range. Despite several tries to break out, it has remained within that range. The performance during the last two weeks, on the other hand, has failed to retain the same buying fervor as it did when the price interacted with the support line previously.
Bitcoin bearish performance over the last five days has resulted in even more downside, with the price dropping below the support line.
As additional fear entered the market, it fell below $40,000 once more.
However, massive accumulation between $39,000 and $40,000 has kept the market from falling any further. It had resulted in a 0.83 percent increase in value to $39,786 at the time of writing.
Is there a chance for more negative consequences?
A breach below the support level could be viewed as a sign of impending bearishness. This is in line with the fear mongering and anticipation that the market would continue to decline. Indeed, others believe Bitcoin price may go below $20,000 in the near future. A significant sell-off, especially from institutions, would be required to achieve such a result.
Bitcoin is still held by some of the world’s largest institutions. Tesla, for example, recently stated in its Q1 2022 financial report that company still has $1.26 billion in Bitcoin and has no plans to sell anytime soon. Grayscale also has Bitcoin in its portfolio, with ambitions to add other cryptocurrencies in the future. Terra, too, has declared plans to buy Bitcoin for billions of dollars.
If significant institutions acquire bitcoin, the floor price is unlikely to fall much lower. The on-chain measures that BTC uses are also in line with what the institutions are doing. The exchange balance measure for BTC, for example, illustrates that BTC has been flowing out of exchanges.
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