How Low Will BTC Drop This Week Following Loss of $80K
Bitcoin has recently experienced notable downward momentum, plunging below its crucial 200-day moving average at $83,000, a significant bearish indicator for the market. As the cryptocurrency grapples with this challenge, it is currently testing the $80,000 support level—often regarded as the last line of defense for buyers. A breach here could trigger further declines, potentially driving Bitcoin toward the psychologically influential threshold of $75,000.
Technical Analysis
Daily Chart Insight
After facing rejection at the $92,000 resistance level, Bitcoin’s sharp sell-off highlighted a prevailing bearish sentiment in the market. The breach of the 200-day moving average signifies a dramatic shift in investor confidence, compounded by the failure to maintain the 0.5 Fibonacci retracement level. This situation has led to considerable liquidations among long positions and has fostered a negative market atmosphere.
As Bitcoin approaches the critical $80,000 mark, this area aligns with the lower boundary of an ascending channel and corresponds to the 0.618 Fibonacci retracement level. Should the price fail to hold this support, it may catalyze a sell-off that could redefine the market landscape, pushing downward to $75,000 and beyond.
4-Hour Chart Dynamics
Analyzing the market at a shorter time frame reveals consolidation between $80,000 and $92,000. The recent rejection from the upper boundary accentuates the hesitancy within the market to commit to a sustained rally. A decisive breakout from this congestion zone is crucial for establishing a clear trend moving forward.
Importantly, a liquidity pool just beneath the recent low of $78,000 indicates a cluster of sell-stop orders, making this an enticing target for institutional players. As a result, traders should brace for potential volatility in the upcoming weeks as the market continues to consolidate, waiting for a breakout in either direction.
On-Chain Analysis
Historically, Bitcoin’s relationship with the Realized Price of 3-6 Month Unspent Transaction Outputs (UTXOs) has been pivotal. This price point often represents a significant support or resistance zone, reflecting the average purchase price of mid-term holders. Currently, Bitcoin is testing the realized price at $83,000, and the outcome of this test will be critical for market sentiment.
Maintaining support above this threshold could bolster bullish sentiment among traders, indicating robust market confidence and the possibility of upwards momentum. Conversely, if the price descends below this level, it could signal a shift to a more fearful market environment, potentially leading to a distribution phase where investors may seek to offload their positions, inviting significant selling pressure.
Consequently, Bitcoin’s trajectory around the $83,000 level remains crucial. A rebound could pave the way for a recovery, whereas a breakdown might signify the onset of a broader correction, giving an opening for savvy investors to accumulate Bitcoin at lower prices.
Source: TradingView
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Disclaimer: Information is provided for educational purposes and does not constitute financial advice. Always conduct thorough research before making investment decisions.
