Key facts
- Bitcoin price dropped 16% since Monday, reaching a four-month low of $61,383.
- Bitcoin tagged the 200-week Simple Moving Average (SMA) for the first time in this cycle.
- The price has broken down from the 50-Month Exponential Moving Average (EMA).
- Rallies from the $60,000 region have progressively weakened since early 2024.
- MVRV Pricing Bands suggest support between $54,000 and $50,000.
Bitcoin has experienced a significant price decline, falling 16% since Monday and reaching a four-month low of $61,383. Market observers are warning that the cryptocurrency may be entering a deeper correction as it retests key technical levels. Rekt Capital noted that Bitcoin has tagged the 200-week Simple Moving Average (SMA) for the first time in this bear cycle, a level that historically signaled the formation of bear market bottoms. The price has also broken down from the 50-Month Exponential Moving Average (EMA), a setup that has preceded market bottoms in previous cycles. Rallies from the $60,000 support region have shown progressively weakening strength since early 2024, suggesting this level may soon be lost as support. Ali Martinez affirmed that the breakdown from the $72,000 support has left Bitcoin in a vulnerable position, with the MVRV Pricing Bands indicating potential support between $54,000 and $50,000, a 25%-30% correction from current levels.
Historically, deviations below the 200-week SMA have been crucial for building bear market bottom formations. In June 2022, Bitcoin reached this level and subsequently lost it as support, leading to further declines to its late 2022 bear market bottom. The current situation shares similarities with past bear market corrections, including rejection from the base of a Macro Triangle and revisiting the 50-Month EMA. Rekt Capital also observed that during bear markets, Bitcoin tends to form multi-month price clusters before distributing to new lows, suggesting there may be one to two such clusters remaining before the final bear market bottom.