Bitcoin (BTC) faced a 10% plunge last week, followed by a notable rebound, triggering a warning from seasoned cryptocurrency analyst DonAlt. The expert cautioned that the bearish trend might persist during this correction phase of the leading cryptocurrency.
Is the Danger Really Over?
DonAlt, renowned for his technical analyses, mentioned on his YouTube channel TechnicalRoundup that Bitcoin has exhibited a pattern of lower highs and lower lows in the weekly timeframe. This pattern suggests a negative market structure currently in place.
The analyst highlighted Bitcoin’s continual decline since its all-time high of around $73,800 in March. He emphasized that the $60,000 level acts as a crucial resistance point on the weekly chart. For Bitcoin to regain its upward trajectory, a sustained move beyond this level is essential. However, given the current price movements, this appears unlikely.
Will $52,000 Support Hold?
Despite Bitcoin’s bleak outlook, DonAlt pointed out that the $52,000 support level, which held during the recent dip, might be a mildly positive sign. He noted that this level is not particularly strong, with a more substantial support level lying near $44,000.
Discussing the future performance of the $52,000 level, DonAlt expressed that he does not foresee a sharp drop below this point. He anticipates that Bitcoin might hover around this level for some time, though there is a risk of breaking this support if adverse macroeconomic developments arise.
Key Inferences
Investors can draw several practical conclusions from the current analysis:
- Monitor the $60,000 resistance level as a crucial indicator for upward movement.
- Consider $52,000 as a temporary support, but be cautious of its strength.
- Be aware of the potential risk if Bitcoin falls below $44,000.
- Stay informed about macroeconomic factors that could impact Bitcoin’s price.
In conclusion, DonAlt predicts that Bitcoin might continue to trade around the $50,000 mark given the current market conditions. However, he urges investors to stay vigilant due to the potential risks embedded in the prevailing market structure.