The cryptocurrency market witnessed a significant setback as the Bitcoin price plummeted below the $58,000 level. This downward move has raised concerns among bullish investors, suggesting a potential continuation of the downtrend toward the $44,000 support level.
Bitcoin’s failure to consolidate above and retest its all-time high (ATH) of $73,700, reached in March, has resulted in a retracement of over 20% on the monthly time frame.
Bitcoin Price At Risk
Crypto analyst “Blockchaineddbb” has provided a noteworthy assessment of the situation. According to the analysis, a daily close below the 200 daily exponential-moving average (EMA), currently positioned at $58,000, indicates a strong likelihood of Bitcoin’s price dropping to $44,000.
The analyst cautions against waiting for a bounce after the daily close below the 200 daily EMA, emphasizing the historical significance of such a breach.
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Blockchaineddbb’s analysis reveals the historical impact of losing the 200 daily EMA. Each time Bitcoin experienced this loss, its price declined by an average of 30%, with losses ranging from 8% to 50%.
The breach of the 200 daily EMA signifies Bitcoin entering an unsafe territory, heightening investor concerns. To mitigate potential losses, the analyst suggests considering an exit point before the expected further decline to $50,000, which is the next significant support level.
Navigating The Bearish Storm
Blockchaineddbb provides average support levels to consider during the bearish sentiment for those who choose to hold their positions.
These levels are estimated at $50,000, $48,000, and $44,000, with the latter being the worst-case scenario. Long-term holders are advised to adhere to their planned averaging strategy, which involves accumulating positions on specific dates such as June 22, September 22, and December 22.
According to the analyst, the target exit price remains at $75,000, with expectations of achieving this milestone by December.
Considering various factors, such as a predicted September dump, the Mt. Gox settlement deadline, and upcoming elections, the analyst suggested that the prevailing bearish sentiment will persist until December.
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Ultimately, if the current bearish sentiment continues, altcoins are expected to suffer losses until the year’s end. It is worth noting that a potential shift in this scenario would only occur if Bitcoin manages to close above the 200 Daily EMA. However, the probability of that happening appears low.
Currently, the Bitcoin price stands at $56,435, just below the critical $58,000 EMA, after falling as low as $53,500 in the early hours of Friday trading.
Featured image from DALL-E, chart from TradingView.com