Cryptocurrency analysts are sounding alarms, forecasting a potential further decline in Bitcoin’s value, with some predicting it could revisit the $42,000 mark. This unsettling projection comes as Bitcoin (BTC) experienced a sharp drop of over 12.8% in the past 24 hours, hitting a five-month low of $52,369 as reported at 10:13 AM UTC. This level was last seen at the end of February 2024, indicating a troubling trend for the leading cryptocurrency.
Alex Kuptsikevich, a senior market analyst at FXPro, suggests that Bitcoin’s downtrend might not be over. “Bitcoin dipped below its 50-week moving average at its lowest point. Without strong buyer support, it could drop even further, triggering a more active sell-off similar to what we witnessed in late 2021 and early 2022. If it fails to hold, a plunge towards $42,000 is possible,” Kuptsikevich stated.
Psychological figures like $42,000 often act as significant benchmarks for crypto investors. How Bitcoin behaves around these levels could set the tone for its momentum in the near term.
Despite the recent bearish pressure, there is still hope for a recovery if Bitcoin can decisively reclaim the $51,000 mark. A pseudonymous crypto analyst, known as the Moon, highlighted this in an August 5th X post, stating, “BTC must get back above the support, otherwise we might dump to $45,000.”
Bitcoin’s over 20% decline aligns with previous bull cycle retracements and was initially triggered by a failed attempt to breach the $70,000 mark. Kuptsikevich noted, “The active pressure on Bitcoin began after a failed attempt to surpass $70K and overcome the resistance of the descending channel seven days ago.”
Despite the grim market outlook, Bitcoin still holds significant support at the psychological $50,000 mark. Data from Coinglass indicates that if Bitcoin falls below this level, over $400 million worth of cumulative leveraged short positions could be liquidated. Should the price drop to $49,400, short Bitcoin liquidations could reach over $520 million across all exchanges.
In conclusion, while Bitcoin faces a challenging period with potential further downside, the key to averting this trend lies in its ability to stay above crucial support levels. Investors and analysts alike will be closely watching the market’s movements in the coming days.
