If we were ever in doubt that Bitcoin was in a bear market, Thursday’s plunge to almost $60K completely dispelled any last hopes of a recovery. From here it is just a case of how far down will this bear market lead the $BTC price, and how quickly can it get there?
$69,000 major support was cut through like butter
Source: TradingView
Since the $BTC price definitively dropped out of the bear flag at the end of January, a more than 32% fall has been the result. If the full correction from the $126,000 all-time high is measured, this now amounts to more than 52%. How much further can the price go?
The expected heavy support at $69,000, the top of the 2021 bull market, just didn’t materialise, and the price cut through this level as though it were butter.
A bounce has occurred from $60,000, which did reach back up to nearly $67,000. However, $65,000, which marks the first top of the 2021 bull market, has become resistance, and the bulls and the bears are fighting it out at this level currently.
Can the current bounce continue?
Source: TradingView
The daily chart shows how the $BTC price has come back up to the $65,000 resistance. Could a continuation of the bounce take place from here? It’s a possibility, and the bounce could reach up to confirm the breakdown from the major $96,000 level, but all the same, there is certainly a possibility of more downside to come.
Having said that, the Stochastic RSI indicators look ready to head back up, and the Relative Strength Index has not been this low since the March 2020 Covid crash.
200-week SMA holds as support
Source: TradingView
Zooming out into the daily time frame it can be seen that the $BTC price has rejected from the 200-week SMA. This high time frame moving average has generally been support for previous market cycles, with the 2021 cycle dropping beneath in the depths of its bear market. If the price can stay above this moving average, it could be quite bullish.
Below this, at $53,000 is the next decent support level. If $65,000 fails, this would be the next probable target for the bears. It can be noted that this level held support for almost the entirety of the 8-month bull flag in 2024, and support and resistance for the double top of the 2021 bull market.
That said, there is one more reason for the $BTC price to get down there, and that is because it marks the extent of the measured move out of the bear flag.
In the indicators at the bottom of the chart, the Stochastic RSI is approaching bottom again, while the RSI is coming down to oversold territory that was last reached deep in the 2021 bear market.
Finally, if there is to be one last attempt by the bulls to extricate themselves from this bear market reversal, it would be that the price would have to end this week back above the $69,000 major support/resistance level. As already mentioned, it is likely that the price would come back to this level in order to confirm the breakdown. Could the bulls push the price up that little bit further and achieve a weekly close above? We have a couple more days to find out.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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