Bitcoin fell below $70,000 for the first time in a long time, amid factors including rising US inflation concerns, growing expectations of a Fed rate hike, declines and uncertainty in technology stocks, ETF outflows, and liquidations in leveraged trading.
This is Bitcoin’s lowest level in three months, leaving $BTC at a critical point. It could continue to fall, or it could rise.
Market analyst Omkar Godbole said technical indicators point to downside risks.
The analyst said Bitcoin’s weekly MACD (Moving Average Convergence Divergence) indicator fell below zero this week, signaling weaker upward momentum. He added that if the weekly candlestick remains negative through Sunday’s close, the bearish signal will be confirmed.
Historical Data Suggests Risk of Further Declines
In an analysis of historical MACD signals, the analyst wrote that Bitcoin’s weekly MACD has generated bearish signals 24 times since November 2012.
The analyst said $BTC fell more than 16% before rebounding in 13 of those 24 bearish MACD signals. If the pattern repeats, $BTC could fall from its current level of $69,000 to about $57,700, the analyst said.
However, the analyst cautioned that the MACD indicator alone cannot definitively predict Bitcoin’s future price movements.
Analyst Identifies a Critical Bitcoin Level
CryptoQuant analyst MacD offered a more specific outlook, saying $BTC’s uptrend will continue as long as the $64,200 level holds. The analyst described it as a critical support level for the market’s direction.
“…Personally, I think Bitcoin’s bull market is still valid as long as it doesn’t fall below the $64,200 level.”
The analyst said losses among short-term investors have reached levels seen at significant lows in previous bull markets. He also stressed that periods of extreme market fear have historically coincided with the formation of significant price lows.
“…The main lows of the market have always been formed in an environment of intense fear.”
*This is not investment advice.
