Bitcoin has been facing selling pressure after the formation of a double top in the weekly chart, as investors continue to assess the threat of Omicron on the global economy. This recent double top formation confirms a steep slide ahead that could result in a severe meltdown in cryptocurrency in 2022.
Virtual currency, in the absence of any central regulator, seems to be an initial step in sucking out the liquidity of real global currencies. Undoubtedly, steep growth in Bitcoin's valuation since April 2017, saw leading cryptocurrency remain in an uptrend from the lows of $510 in April 2017, forming a peak in December 2017 at $19,853, before witnessing its first crash of the crypto world in December 2018 with a low at $3,219.
This steep slide, however, did not discourage crypto investors. Bitcoin emerged with a more lucrative virtual currency that attracted the masses with renewed zeal to grab Bitcoins with both hands.
After one more downswing in March 2021 up to $39,370, Bitcoin never looked back, till the formation of the second peak at $64,412 in April 2021. For sure, Bitcoin underwent an extremely volatile move during April 2021 that resulted in a wild swing from $64,412 to $48,328, but that could not control the infatuation of crypto lovers.
Once again, Bitcoin started to slide from the peak level and tested a low in July 2021 at $29,560 that was a little shocking for those investors who entered at the peak April 2021 levels. But that drop could hardly control the zeal of risky traders in July 2021 who started to hang Bitcoin at $68,935 in November 2021.
However, since then, the steep slide that continues during December 2021 looks to be the evidence needed to expect the advent of a crypto crash soon.
The speed at which Bitcoin is moving down indicates that, once again, Bitcoin could test the $18,507 level by May 2022. There may be a few rallies during this downward voyage, but selling could continue amid growing fear of a rapid resurgence of COVID via a new, unknown strain.
Growing fear over potential lockdowns due to the spread of the Omicron variant, together with inflationary pressures may see the crowd prefer to hold on to real global currency to meet real-life needs. This basic phenomenon could compel crypto bears to remain in command.
Disclaimer: The author of this analysis does not have any position in Bitcoins. Readers are advised to take any position at their own risk; as Crypto currency market is one of the most liquid market of the world.