Bitcoin (BTC) Price is Plunging, Key Reasons Why Bears Are Not Done Yet

Bitcoin price is down over 10% in two days. BTC/USD is trading well below $20,000 and there could be a drop towards the $17,550 support.

Bitcoin Price Prints Bearish Breakdown

This past week, bitcoin price attempted a clear move above the $22,500 and $22,650 resistance levels. The BTC/USD pair traded as high as $22,794 and struggled to continue higher.

Recently, ethereum saw a major decline below the $1,500 support. It sparked bearish moves in ETH/BTC and also increased selling pressure on bitcoin. As a result, there was a sharp decline below the $21,000 and $20,800 support levels.

Bitcoin 4-hours chart | Source: BTCUSD on TradingView.com

Besides, the price traded below a key bullish trend line with support at $20,800 on the 4-hours chart. The bears were able to push the price below the $20,000 level and the 50 simple moving average (4-hours, blue).

There was a clear move below the 76.4% Fib retracement level of the upward move from the $18,549 swing low to $22,794 high. It is now trading just below the $18,549 swing low.

An initial support sits near the $18,350 level. The first major support is near the $17,550 and $17,500 levels. It is near the 1.236 Fib extension level of the upward move from the $18,549 swing low to $22,794 high.

A clear move below the $17,500 support could spark another sharp decline. In the stated case, the price may perhaps test the $16,000 support.

On the upside, an immediate resistance is near the $18,650 level. The first major resistance is now forming near the $19,550 level. A clear move above the $19,550 resistance might open the doors for a fresh increase. The next key resistance might be near the $20,170 level, above which it might even test the $21,000 resistance. Any more gains could set the pace for a test of the $22,000 resistance.

Overall, bitcoin price is gaining bearish momentum below the $20,000 support zone. If the bears remain in action, the price may perhaps drop towards the $17,550 support. Conversely, the price might start a recovery wave and revisit the $19,550 resistance zone in the coming days.