Bitcoin (BTC)’s recent price drop has raised concerns about the cryptocurrency’s future performance, with some analysts warning that BTC’s next key close could signal the start of another major correction.
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Bitcoin Poses Another Big Risk
On Friday, Bitcoin fell more than 7% intraday to a three-week pass of $65,700, raising concerns about the crypto-flagship’s short- to mid-term performance. The cryptocurrency has been trading between the levels of $65,000-$72,000 since the beginning of the February crash.
After its recent decline, the analyst Altcoin Sherpa noted that holding the current levels is important, as the loss of this border can quickly send the price of BTC 6%-10% down to the next support area, around $60,000-$62,000.
Many market observers have also warned that the cryptocurrency is currently breaking an important bearish formation, which could also cause a major crash to new lows if the price does not reverse soon.
Notably, Bitcoin has been forming a bearish flag pattern on a daily basis for nearly two months, retesting the lower boundary of the formation multiple times. However, BTC is now in danger of losing this level as a support, as it shows many signs related to the signals.
Ted Pillows asserted on X that Bitcoin is not only underperforming in price but also losing momentum as it has lost its rising RSI. “It’s a big sign of weakness,” he added.
The analyst reiterated that BTC’s collapse is “just a matter of when, not if,” warning that the flagship cryptocurrency has already broken a similar two-month bear flag pattern earlier this year.
Meanwhile, Ali Martinez suggested that BTC could drop another 30%-45% based on its historical performance over the past decade. As he explained, Bitcoin started a new bull run after falling below its long-term owner’s rent price, and it’s −0.2 standard deviation band, located at $48,387 and $36,657 levels, respectively.
“I will watch these areas for opportunities to buy dips before the next bull cycle,” he said.
All Eyes on BTC’s Close Weekly
Analyst Rekt Capital emphasized another sign for Bitcoin, noting that BTC has once again fallen below the 200-week Exponential Moving Average (EMA). During this decline, the cryptocurrency takes this level as resistance again, setting the focus on the upcoming weekly close.
The analyst previously explained that “If the 200-week EMA is lost as support this week and the price Closes Weekly Below it again, Bitcoin could actually turn the EMA into a new resistance.”
Last week, the largest crypto by market currency technically closed below the EMA of 200W after trying to “retest it after the exit” as support, but failed to finish the week above the 68,000 area. “That means the price has technically started to break out of the EMA,” and a weekly close below this level will confirm it.
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“Given this recent Weekly Close, there is therefore an opportunity to enter the 200-week EMA to test and see if BTC can strengthen the recovery to support,” he explained, “But the suspicions have been confirmed: the 200-week EMA acts as both unreliable resistance and a clear, unreliable role.”
The analyst concluded that indecision could lead to a reevaluation of the area “before it eventually turns into a more Macro Downside over time.”
As of this writing, Bitcoin is trading at $65,600, a decrease of 6% in the weekly period.
Featured image from Unsplash.com, Chart from TradingView.com
