Bitcoin falls below a key technical level which indicates that the leading cryptocurrency could fall to as low as $40,000, according to Pankaj Balani, the CEO of crypto derivatives exchange Delta Exchange. Bitcoin stood at $57,328 at the time of writing, around 3.6% higher in the past 24 hours.
Speaking to Bloomberg on May 11, Pankaj Balani, the CEO of digital asset derivatives exchange Delta Exchange said that Bitcoin could result in a price drop if higher support levels fail to hold.
The leading cryptocurrency could drop to as low as $40,000 after falling below a key technical level, indicating significant losses for the BTC/USD trading pairs.
Balani says that Bitcoin's fall below its 50-day moving average, around $56,000 could trigger a further decline, and all crypto assets including Ether “should move lower.”
He explains that the 50-day moving average is a key psychological level that is closely watched by investors, and also used by some algorithmic traders as a point at which to sell.
Balani believes that the cryptocurrency's fall to $40,000 is another important psychological level where investors should start buying back in, adding:
"The short-term momentum has been lost. So it wouldn't be surprising to revisit the $40-$42,000 kind of zone. That is where we might find very strong support."
He said this was the level where Tesla added Bitcoin to its balance sheet:
The CEO of Delta Exchange said that investors chasing quick gains for tokens such as Ether and Dogecoin was a worrying sign for Bitcoin and the cryptocurrency market as a whole.