Bitcoin (BTC) is facing a new wave of bearish predictions after its steep decline over the weekend, when its price dropped as much as 15%. As the dust settles, traders and analysts try to predict the market’s next move. The potential for Bitcoin price to drop to $59,000 emerges as a major concern.
Bitcoin price: Where will it drop the most?
cryptokoin.com As we reported, the weekend sell-off shattered the temporary rally that saw Bitcoin challenge the $61,000 resistance level. Now, the world’s leading cryptocurrency finds itself precariously around $62,000, raising concerns about a new crisis.
Popular analyst Mark Cullen is among those preparing for further price declines. Using Elliott Wave theory, a technical analysis framework, Cullen suggests that a final leg towards around $59,000 could be imminent. This would mark Bitcoin’s lowest point since late February and represent its biggest decline ever from recent all-time highs; A staggering 20% drop.
Weekly closings are critical
Another analyst, Matthew Hyland, focuses on the upcoming weekly candle close to gauge the potential length of the current pullback. Hyland points out that Bitcoin has fallen below the critical support level of the 10-week simple moving average (SMA), currently at $64,130. According to Hyland, the nature of the weekly close will be very important. Historically, whenever Bitcoin has tested this level in the past, it has proven to be a good buying opportunity and the price has never closed definitively below the SMA. However, a full candle close below this key indicator could signal a longer-term pullback.
Additionally, CryptoQuant contributor Binh Dang offers a longer-term perspective that could demoralize Bitcoin bulls. Using the proprietary Adjusted Cumulative Days of Value Destroyed (CVDD) metric, Dang predicts a potentially extended period of low prices before Bitcoin attempts another attack on record highs.
The CVDD metric tracks the number of days a coin remains in the wallet before being transferred to the chain, taking into account the current price. Based on CVDD’s historical performance in setting local tops, Dang predicts that Bitcoin will revisit and accumulate around a price point corresponding to Phase 2 on its chart, located at roughly $52,000.
Unless there is a sense of panic in the market, worst case scenario is $40,000
While Dang acknowledges that deeper corrections are possible, he believes that current geopolitical tensions driving the market lower are unlikely to repeat the panic witnessed during the COVID-19 crash in March 2020. However, there is said to be a drop to the “Phase 1” line of the chart. Sitting just below $40,000 remains the “worst case scenario” for Bitcoin bulls.
Bitcoin investors face a period of increasing uncertainty, with a combination of technical and onchain indicators pointing to a potential price decline. The next few days will be crucial as the upcoming weekly close and other developments in the geopolitical landscape will significantly impact the course of the cryptocurrency. It is not yet known whether Bitcoin will weather this storm and start a new rise or succumb to a longer correction.
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