What's really behind the bitcoin decline and why it could take the cryptocurrency as low as $20,000

People enjoy themselves at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images

The price of bitcoin fell about 10% Tuesday to around $32,000 and is on pace for its third straight day of losses, bringing most other cryptocurrency prices down with it. It's down 50% from its April all-time high.

Many are speculating the price moved on news that U.S. officials recovered most of the ransom paid to the Colonial Pipeline hackers.

Analysts, however, say it's more likely the movement is part of wider consolidation coming off highs from a month ago. In other words, the technical breakdown in the charts is driving the action and technical analysts see a possible bottom as low as $20,000 from here.

Dave Keller from Sierra Alpha Research said in a market video update to clients that $30,000 is the support level to watch, and that bitcoin is a market in a clear downtrend.

"Movement in any given day can be filled with noise and short-term action," he said, but the chart "has transitioned from an uptrend phase to a downtrend phase," citing lower highs, lower lows, breaking down through moving averages and breaking down through traditional support levels.

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