Analysts have assessed the recent drop in Bitcoin.
Bitcoin lost the critical $70,000 level for the first time in a long time and fell to its lowest level in three months. This selling pressure is attributed to rising inflation concerns in the US, increased expectations of a Fed interest rate hike, declines and uncertainty in technology stocks, ETF outflows, and liquidations in leveraged trading.
Critical Support Level in Bitcoin is Back on the Agenda!
At this point, Bitcoin retreated to $67,500, testing its 200-week simple moving average (SMA) at $67,993. With this decline, BTC tested this long-term trend line for the first time in approximately 11 weeks since August.
In his latest analysis, Keith Alan, co-founder of Material Indicators, stated that this level is critical for BTC, noting that it has historically served as a key support and resistance point during Bitcoin’s bear markets.
Alan also warned that the 200-week moving average coincides with a significant RSI support and resistance zone. He noted that the weekly RSI is currently down to around 41.5, a level that also acted as support in late July, and that a drop below 41.5 could lead to a retest of the $57,700 cycle bottom. According to Alan, maintaining the current support zone could allow the uptrend to regain strength.
There May Be a Buying Opportunity in Bitcoin!
As Bitcoin tests its 200-week moving average with its recent drop, Strive CEO Matt Cole suggests this level represents a buying opportunity.
Matt Cole noted that BTC tested its 200-week moving average, a level that has historically been favorable for long-term investors.
In his analysis, Cole also added that Strive’s balance sheet performed well during the BTC declines, that the company raised funds through a preferred stock issuance rather than debt, and that it did not use BTC assets as collateral, therefore it did not carry the risk of a margin call or forced sale.
$100,000 May Still Be Possible!
Lastly, crypto analyst Crypto Capo, in his latest chart for Bitcoin, assessed that a local bottom may have largely formed. The analyst stated that his previously proposed bullish scenario was quite accurate, but he ultimately decided against it, adding that he doesn’t regret his decision.
Analyzing Bitcoin’s three-day chart and noting that it may have formed a local bottom, the analyst points to the $64,900–$73,800 range as a key support zone. In this context, the analyst predicts that after a bottom forms in this region, Bitcoin could rise towards the resistance zone between $100,000 and $108,400.
*This is not investment advice.
