With the recent developments, Bitcoin, the world’s largest cryptocurrency, faced significant selling pressure after Tesla’s decision to liquidate $373 million worth of BTC holdings. While this move led to a drop in Bitcoin’s price, the cryptocurrency is currently trading at $26,060 and has a market cap of $507 billion. So what’s next?
These levels are critical for Bitcoin
On-chain indicators and technical analysis suggest that the BTC price could drop further as it drops below the 200-day moving average. In particular, crypto market analyst Ali Martinez points to a historical trend in which Bitcoin tends to touch Actual Price after breaking below the 200-day SMA. Current Actual Price is around $20,350. Confirmation of the uptrend is dependent on a sustained close above the 200-day MA, despite a buy signal offered by the TD sequential on the daily chart. The $25,200-24,800 region is emerging as a critical support level to watch, as exceeding this level could drop the Bitcoin price as low as $20,000.
Multiple Bitcoin analysts weighed in on the situation. Peter Brandt, a respected market analyst, warns that a close below $24,800 could negatively impact the daily and weekly charts. Another key analyst, Rekt Capital, highlights a bearish technical signal characterized by the Double Top pattern. This pattern could shift the role of $26,000 from support to resistance. While many experts anticipate a potential buying opportunity around $25,000, optimism is combined with caution. Prominent cryptocurrency analysts such as CrediBULL Crypto, Crypto Tony and Crypto Birb believe that Bitcoin will likely bottom above $25,000, showing similarities to past market corrections prior to BTC’s previous all-time high.
Bloomberg analyst: BTC volatility has decreased
In the context of Bitcoin’s market dynamics, there is also a notable trend towards decreasing volatility. Bloomberg senior macro strategist Mike McGlone observes that Bitcoin’s volatility has decreased significantly over the past few years. Although this has reduced the relative risk of cryptocurrencies compared to the past, Bitcoin’s volatility is still higher than traditional store-of-value assets such as gold. Mike McGlone’s analysis reveals that Bitcoin’s 90-day volatility is declining steadily, though still higher than that of gold. This trend means that days of significant upward price fluctuations for Bitcoin may be on the wane. McGlone interprets this as “the pump days are over.”
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