Bitcoin (BTC) saw a 20% price drop this weekend, briefly losing the $50,000 support level. The rest of the market followed the flagship cryptocurrency, crashing around 23% over the past three days. Since then, the crypto market has temporarily regained some key levels, but analysts fear the bleeding is not over yet.
Has the Bitcoin Bottom Been Reached?
Following Bitcoin’s drop below $50,000, crypto analyst Altcoin Sherpa shared his thoughts on BTC’s performance. According to him, the flagship cryptocurrency hit one of its possible lows on Monday morning after reaching the $49,000 support zone.
Related Reading: Bitcoin RSI Turns Bearish for the First Time Since August 2023, Will It Crash Below $40,000?
The huge drop to the $49,000-$50,000 area, representing a 17% drop in less than 24 hours, could be the bottom, Sherpa said. However, he believes lower support levels are likely to be tested in the coming days.
According to the post, the analyst won’t “sit comfortably” until BTC prices test the $40,000-$47,000 area, as these levels “received much more support.” Bitcoin’s current price action reminds the analyst of its performance during the 2021 rally.
At the time, BTC saw the January consolidation zone as “the main focus for the temporary bottom” during that summer. The violent dump in the summer of 2021, which resembles the current crash, was followed by a bottom that “formed over the course of several months.”
Based on this, Sherpa believes that the January 2024 price range could be the main focus. He also reaffirmed his previous forecast for the cycle, claiming the market would resume its run in the fourth quarter of 2024 and continue into the first quarter of 2025:
What will happen after this mess is anyone’s guess; my personal opinion is that we’ll hang around for the next few months after this dump is over and then have a great fourth and first quarter of 2025. Survive until then.
BTC sees the deepest pullback of the cycle yet
According to Rekt Capital, the recent Bitcoin crash officially became the deepest setback in the cycle. BTC saw declines of 23% and 25% in May and July respectively, which has now been surpassed by the 29% decline recorded over the past two weeks.
Also trader and market analyst Crypto Bullet weighed about current BTC performance. To the analyst, Bitcoin’s chart is reminiscent of the 2020 COVID-19 crash, showing a similar Descending Broadening Wedge pattern.
According to the post, the largest cryptocurrency by market capitalization saw a similar dump in March 2020, followed by a price recovery and breakout from the pattern in the coming months. Likewise, BTC tested the lower support levels within the pattern on Monday morning, which could indicate that the price will recover soon.
Nevertheless, Crypto Jelle believes that Bitcoin’s price will test key levels during this weekly open. According to him, BTC is “still holding on to the falling, widening wedge and holding a sensible support area.” Because of this achievement, Jelle believes that “the higher the end of the day, the better.”
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Finally, the well-known analyst Ali Martinez declared that Bitcoin needs to regain the $54,000 support level to avoid falling to the $40,000 mark. Based on BTC’s MVRV price bands, the analyst believes that the flagship cryptocurrency could soon retest the $67,000 resistance level if it holds the current price.
At the time of writing, BTC has recovered 8.8% from its fall and is trading at $54,320.
Featured image from Unsplash.com, chart from TradingView.com
