Bitcoin (BTC) is at a key point as geopolitical tensions rise and bearish patterns appear. Some analysts are warning of a possible 15% drop if a critical support level doesn’t hold.
Following news of renewed US strikes on Iranian targets, Bitcoin fell about 5% from $76,000 to a one-month low of $72,589. Earlier this week, the cryptocurrency was trading between $77,000 and $78,000 after recovering from last week’s decline. But the growing geopolitical tensions have pushed the price toward a crucial area.
Analyst Ali Martinez confirmed that BTC has hit a major support zone after losing the $75,000-$76,000 range. He previously noted that the leading crypto has been moving within an ascending channel that started forming after the early February crash. Two key levels will likely decide its next direction. As he explained, if Bitcoin breaks above the $78,258 resistance, it could rally toward the $84,000 barrier. On the other hand, breaking below the $75,733 support could push the price toward the lows seen in late March and early April.
Now, the price is hovering near the lower edge of this ascending channel, which could set the stage for a 15% decline. According to his post, the channel’s floor lines up with the 100-day Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level, making the current price range very important. “This cluster between $73,000 and $71,300 serves as a major structural floor,” he said, adding that if buyers defend this zone, we could see a “steady expansion back toward $77,000 or even $79,500.” On the flip side, he warned that if Bitcoin loses the $71,300 level, “it would open the door to an extended value window near the February base of $60,000.”
BTC’s bearish setup signals a risk of further decline
Market observer Mister Crypto shared a bearish outlook on the flagship crypto, pointing to a textbook bearish pattern on BTC’s daily chart. According to the trader, Bitcoin has been forming a Head and Shoulders pattern since mid-April, with the pattern’s neckline around the $75,000 level. The chart shows that the left shoulder formed during the late April pullback, and the head developed during this month’s rally. Meanwhile, the right shoulder started forming after the price was rejected at the $82,500 resistance.
The trader said the pattern is playing out “almost perfectly,” which “confirms the bearish thesis” and suggests a drop to lower levels may be coming soon. “Now that we have broken back into the range after losing $75,000, the probability of a move toward the range lows around $63,000 is increasing,” he wrote.
Similarly, analyst Daan Crypto Trades noted that Bitcoin is “putting in a similar reaction after that horizontal level and Daily 200MA/EMA retest compared to January this year.” Specifically, BTC held above the early November lows for about two months before rallying in mid-January toward the 200-day Exponential Moving Average (EMA) and the key $98,000 horizontal level. The price was rejected there, briefly consolidated near the local lows, and then broke down to new lows. Now, the price has shown a similar pattern, being rejected at both the $80,000 horizontal level and the 200-day MA and EMA. As a result, the analyst believes BTC will see “another lower high in the bigger down trend until proven otherwise.”
Featured Image from Unsplash.com, Chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs about Bitcoin testing a key support level with bearish signs written in a natural clear tone
BeginnerLevel Questions
1 What does it mean when people say Bitcoin is testing a key support level
It means the price is dropping and is now at a price point where it has historically bounced back up If it holds the price might go up again If it breaks the price could fall further
2 What is a bearish sign
A bearish sign is a signal that suggests the price is likely to go down It could be based on trading volume technical chart patterns or news that makes investors nervous
3 If Bitcoin drops to 60000 should I sell right now
Not necessarily A drop to 60000 is a prediction not a guarantee Selling in a panic often locks in a loss Its usually better to have a plan before the price moves rather than reacting in the moment
4 Is this the end of Bitcoin
No Bitcoin has gone through many large drops in the past and recovered A drop to 60000 would still be a relatively high price compared to its history Its a normal though scary part of the crypto cycle
5 What does 60000 have to do with anything
60000 is a major psychological and technical price level Its a round number that traders watch closely It was also a previous high and support zone so many people have placed buy or sell orders around that price
Intermediate Advanced Questions
6 What specific bearish signs are you referring to
Common signs include a death cross lower highs high selling volume and a break below a trendline that had been supporting the price
7 How is support actually determined
Support is identified by looking at historical price charts for areas where the price has stopped falling and reversed course multiple times Its also based on the order bookwhere a large number of buy orders are sitting
8 What happens if Bitcoin doesnt hold the support level and drops to 60000
If