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Despite the gloomy outlook, Bitcoin could prevent more downside pressure if it manages to remain above the $51,000 mark.
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Crypto analysts warn that the current Bitcoin sell-off could lead to lower lows, potentially threatening a dip below the $45,000 mark.
Bitcoin (BTC) price fell over 12.8% in the past 24 hours, to trade at a five-month low of $52,369 as of 10:13 a.m. in UTC, according to Cointelegraph data. Bitcoin was last trading at this level at the end of February 2024.
Yet, Bitcoin’s downtrend could potentially extend to the $42,000 mark, according to Alex Kuptsikevich, senior market analyst at FXPro.
The analyst told Cointelegraph:
“At its lowest point, Bitcoin dipped below its 50-week moving average. Without strong buyer support right now, it goes even lower, and it would trigger an even more active sell-off as it did in late 2021 and early 2022. If it doesn’t hold either, it’s worth preparing for a failure towards $42K.”
Round psychological numbers like $42,000 often represent key focal points for crypto investors and the price action at these levels could determine Bitcoin’s momentum in the short term.
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Can Bitcoin price remain above $45k?
Despite the recent downside pressure, Bitcoin could still stage a recovery and avoid printing lower lows.
However, Bitcoin needs to decisively reclaim the $51,000 mark to avoid more downside, according to pseudonymous crypto analyst the Moon, who wrote in an Aug. 5 X post:
“BTC must get back above the support, otherwise we might dump to $45,000.”
Bitcoin’s over 20% decline remains in line with previous bull cycle retracements and was initially triggered by a failed attempt to conquer the $70,000 mark, according to Kuptsikevich. The senior market analyst added:
“Active pressure on the first cryptocurrency started after a failed attempt to go above $70K and overcome the resistance of the descending channel seven days ago.”
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Bitcoin holds significant support at the $50k mark
Despite the gloomy market outlook, Bitcoin’s price has a significant support level at the $50,000 psychological mark.
Over $400 million worth of cumulative leveraged short positions would get liquidated if Bitcoin potentially fell below the $50,000 mark, according to Coinglass data.
Short Bitcoin liquidations would reach over $520 million across all exchanges if the Bitcoin price fell below the $49,400 mark.
Magazine: Criminal at Bitcoin 2024, BTC Strategic Reserve Bill, and more: Hodler’s Digest, July 28 – Aug. 3
This article first appeared at Cointelegraph.com News
