Bitcoin’s (BTC) latest price drop has raised concerns about the cryptocurrency’s coming performance, with some analysts warning that BTC’s next major close could mark the start of another major correction.
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Bitcoin risks another major crash
On Friday, Bitcoin fell more than 7% intraday to a three-week low of $65,700, raising concerns about the flagship’s performance in the short to medium term. The cryptocurrency has been trading between $65,000 and $72,000 levels since the early February crash.
After the latest decline, analyst Altcoin Sherpa noted that holding current levels is crucial as losing this line could quickly send BTC’s price down 6%-10% to the next support area, around $60,000-$62,000.
Several market observers also warned that the cryptocurrency is currently breaking a crucial bearish formation, which could also trigger a massive crash to newer lows if the price does not recover soon.
Notably, Bitcoin has been forming a bear flag pattern on the daily time frame for almost two months, with the lower boundary of the formation being retested multiple times. However, BTC now risks losing this level as support as it shows several worrying signs.
Ted pillows claimed on “A major sign of weakness,” he added.
The analyst also emphasized that BTC’s collapse is “just a matter of when, not if,” warning that the flagship cryptocurrency has already broken off a similar two-month bear flag pattern at the start of the year.
Meanwhile, Ali Martinez suggested that BTC could fall another 30%-45% based on its historical performance over the past decade. As he explained, Bitcoin has initiated new bull runs after falling below the long-term holder’s realized price, and the standard deviation band of -0.2 is at the $48,387 and $36,657 levels respectively.
“I will be watching these zones for buying opportunities ahead of the next bull cycle,” he stated.
All eyes on BTC’s weekly close
Analyst Rekt Capital marked another worrying sign for Bitcoin, noting that BTC has once again fallen below the 200-week Exponential Moving Average (EMA). Amid this decline, the cryptocurrency is once again treating this level as resistance, focusing on the upcoming weekly close.
The analyst previously explained: “If the 200-week EMA as support is lost this week and the Weekly Close price goes back below it, Bitcoin could actually turn the EMA into new resistance.”
Last week, the largest cryptocurrency by market cap technically closed below the 200W EMA after attempting to “retest” this “post-breakout” as support, but failed to end the week above the $68,000 area. “That means the price has technically caused a collapse in the EMA,” and a weekly close below this level would confirm this.
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“Given this latest Weekly Close, there is therefore room for another dip into the 200-week EMA for another test to see if BTC can consolidate a clawback to support,” he explained, “but the general suspicion has been confirmed: the 200-week EMA acts as both an unreliable resistance and an unreliable support, never really confirming a clear role.”
The analyst concluded that the indecision could lead to further retests in this area “before ultimately breaking down into additional macro downsides over time.”
At the time of writing, Bitcoin is trading at $65,600, down 6% in the weekly time frame.
Featured image from Unsplash.com, chart from TradingView.com