Bitcoin could crash below key support level as resilience seems short-lived
By Frances YueThe crypto may head toward $55,000 if it breaks below support level at $73,745, analyst saysBitcoin's brief resilience last week during a global market rout appeared to be short-lived by Monday, threatening to hand crypto bulls another headache.The world's largest cryptocurrency (BTCUSD) fell to as low as $74,436 on Monday, the lowest level since Nov. 7, according to Dow Jones Market Data. It traded at around $79,000 on Monday afternoon, paring some earlier losses, while it is still down 27.8% from its record high at $109,225 reached on Jan. 20, President Donald Trump's inauguration day.The recent fall has put bitcoin in danger of breaking below its key long-term support level at $73,745 from a technical perspective, according to Tyler Richey, co-author at market analysis firm Sevens Report.If bitcoin breaks below that level, it may head toward the range of $55,000 to $57,000 next, Richey wrote in a Monday note.While bitcoin outperformed U.S. stocks last week after Trump announced a series of tariffs against U.S. trading partners on April 2, it has been difficult for bitcoin to maintain its strength with the unusually high level of volatility across risk markets, said Andrew Baehr, head of product and research at CoinDesk Indices."It will be much harder to get folks to focus on a digital-asset investment allocation when the VIX is above 30," Baehr wrote in a Sunday note.The Cboe Volatility Index VIX, or Wall Street's so-called fear gauge, stood at a rare high of 48.4 on Monday, more than three standard deviations from its long-run mean of 19.5, according to FactSet data.What's more, it appeared that the post-election optimism among crypto traders has waned, as bitcoin's trading volume returned to pre-election levels, according to analysts at crypto research firm Kaiko.Last week, bitcoin's weekly trading volume was around $91 billion, over 45% below the average in November last year, showing that many traders are sitting on the sidelines, the analysts said.-Frances YueThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.