Analyst establishes critical Bitcoin level on the downward trend
Bitcoin (BTC) has exited a four-month price range following a decline from $60,000, bottoming out at $53,540. A leading cryptocurrency analyst now anticipates that BTC could revisit these lows and potentially drop further within a bearish context.
The analysis, shared by CrypNuevo in his “Sunday Update” thread on X, points to crucial technical indicators. According to CrypNuevo, “The next key level to the downside is exactly $51.7k.”
This $51,700 price level aligns with leverage liquidation pools that were established after BTC dipped to $53,540. Additionally, it corresponds with the 50-week exponential moving average, a robust price and trend gauge.
CrypNuevo employs a strategy focusing on candlestick wicks as indicators of market imbalances. Historically, Bitcoin tends to correct these imbalances by revisiting 50% or 100% of the wick levels before confirming reversals. CrypNuevo expects BTC to retrace to levels between $55,200 and $53,540 to fill the wick.
However, adverse macroeconomic data, such as the United States Consumer Price Index (CPI), could push Bitcoin lower. CrypNuevo remarked, “We could initially see a drop to fill at least 50% of the wick. A bounce from this level is probable, but a drop below the full wick level would likely find support around $51.7k.”
Regarding upside potential, CrypNuevo believes that disappointing CPI figures could spur a rally back towards $60,000. He identifies this as a strong resistance level that might not yield on the first attempt. CrypNuevo cautioned, “We observe liquidations forming on the upside, but until we reclaim $60k (previous range lows, now a robust resistance), it remains outside my target range. Step by step.”
Breaking past the $60,000 resistance would restore Bitcoin to its four-month range, suggesting that the recent crash was a temporary deviation. Finbold also highlighted this level as crucial for the upcoming week, leaning towards a downside movement.
Investors are advised to exercise caution and avoid excessive exposure through leveraged trades as developments unfold in July.
Disclaimer: The information provided in this article should not be construed as investment advice. Investing in cryptocurrencies carries inherent risks, and investors should be mindful of potential capital losses.
