In recent times, Bitcoin’s price journey has been nothing short of a roller coaster. After briefly surpassing the $66,000 mark, Bitcoin experienced a significant downturn, falling below several crucial support levels. This price movement allowed bearish traders to regain control over the largest cryptocurrency by market cap. As Bitcoin attempts to recover, the bears continue to maintain their strength, with a recent failure to break the MA-200 suggesting that the uptrend may be temporary, potentially signaling a larger crash on the horizon.
Significance of Bitcoin Price Failing at MA-200
Crypto analyst RLinda highlighted in a TradingView post that Bitcoin’s price made an attempt to break the M1-200 level. This effort was visible on the daily chart as the price approached the $64,000-$65,000 resistance zone. Unfortunately, the $64,000 resistance proved formidable, causing Bitcoin’s price to retract once more.
Related Analysis
The consequence of this failure at the daily MA-200 is that Bitcoin’s price is forming a descending channel. Typically, descending channels are indicators of potential crashes, adding to the bearish sentiment surrounding Bitcoin. The price breaking a range boundary along with a strong liquidity zone has led the crypto analyst to believe that the market could be heading further downwards.
With the bears in control, it’s a question of when, not if, Bitcoin’s price will retrace again. The critical question remains: how low can the price potentially drop? The crypto analyst anticipates at least a 10% decline, which could result in Bitcoin’s price falling below $60,000 once more.
The key resistance levels identified by the analyst are $62,745 and $64,955. Successfully surpassing these levels would confirm an uptrend. Conversely, RLinda identifies the support levels at $60,000, $59,250, and $57,700. If Bitcoin fails to maintain these support levels, the dip could be more severe than expected, possibly plummeting to as low as $52,000.
Strategies to Mitigate Bearish Pressure
Another analyst, Alan Santana, has also noted Bitcoin’s failure to break the MA-200. He explains that trading below this level has reinforced the bearish bias, with a further decline anticipated.
Related Insights
Despite the bearish outlook, there are developments that could alleviate the mounting bearish pressure. Firstly, if Bitcoin closes above $66,500 on the weekly chart, it could weaken the bearish sentiment. Secondly, achieving a monthly close above $71,000 could also mitigate the bearish bias.
These scenarios would invalidate the current bearish pressure on Bitcoin’s price. “As long as Bitcoin trades below $66,500 (short-term) or below $71,000 (long-term), the bearish bias remains intact,” cautions the crypto analyst.
Overall, while Bitcoin continues to face significant challenges at the MA-200 resistance level, strategic price movements could potentially alter the current bearish outlook, offering hope for bullish traders.
