Bitcoin price retreated on Monday and moved below the important support level at $70,000 as the recent momentum faded. It is now in its fourth consecutive week in the red and is down by 45% from its all-time time high. BTC could be at risk of a deeper dive to $60,000 as Goldman Sachs delivers key warnings on the stock market.
Goldman Sachs Warns on the Stock Market
Analysts at Goldman Sachs warned about the US stock market despite the rally on Friday last week. In a note on Monday, analysts at its trading desk said that the US stock market was at risk of more selling because of the Commodity Trading Advisors (CTA).
The desk warned that these CTAs may sell stocks worth over $33 billion, a figure that may surge to over $80 billion if the S&P 500 Index drops below $6,707.
Meanwhile, another group of Goldman Sachs analysts said that hedge funds continued shorting shares. The notional short selling across single stocks soared to a record high since it started collecting the data in 2016.
Therefore, there is a risk that the stock market will drop in the coming weeks. At the same time, the bond market may come on edge as China asked its banks and other financial services companies to start selling US government bonds.
All the factors are highly bearish on the Bitcoin price because it often drops when US stocks and bonds are not doing well. For example, the value of BTC dropped to $60,000 last week as the Nasdaq 100 and S&P 500 indices plunged.
Bitcoin is facing other major headwinds, including the falling futures open interest, a sign that demand in the futures market waned. Data compiled by CoinGlass shows that the futures open interest plunged to $45 billion from last year’s high of over $95 billion.
Bitcoin Price Prediction: Technical Analysis
The weekly chart shows that the BTC price has continued its strong downward trend in the past few months, moving from a high of $126,200 in October to the current $69,000.
It has moved below the 50% Fibonacci Retracement level. Additionally, the 50-week and 100-week Exponential Moving Averages (EMA) are nearing their bearish crossover.
It also remains below the Supertrend indicator, while the Average Directional Index (ADX) has jumped to 30, a sign that the downtrend is gaining momentum.
Therefore, the most likely scenario is where Bitcoin price continues falling, with the next key target being at $60,000. A move below that level will point to more downside, potentially to the 61.8% Fibonacci Retracement level at $57,780.
On the other hand, a rebound above the 38.2%Fibonacci Retracement level at $83,750 will invalidate the bearish Bitcoin price prediction.