Bitcoin losses could steepen after the cryptocurrency fell below $60,000, analysts say
by Moneyofficeteam 1 May 2024 · Cryptocurrency
The bitcoin sell-off could get worse before it gets better, according to analysts who look only at price charts. The flagship cryptocurrency just posted its first negative month in eight and worst month since November 2022. The downtrend intensified on Wednesday when it tumbled under the $60,000 level for the first time since February, as stubborn inflation and uncertainty around Federal Reserve interest rate policy kept markets under pressure. That was a key support level for bitcoin, representing the approximate convergence of the March low and 100-day moving average, according to Ari Wald, an analyst at Oppenheimer. It’s also a 38.2% retracement of the January to March rally phase, when bitcoin gained more than 66%, said David Keller, chief market strategist at StockCharts.com, referencing stochastic momentum indicators . Although the longer-term uptrend is still intact, Wednesday’s breach of support confirms a near-term top and that bitcoin could fall even further, below $50,000, Wald said. BTC.CM= 1D mountain Bitcoin breaches the key $60,000 support level “We see counter-trend risk down to $49,000 support marking both the February breakout, above its March 2022 peak, and its 200-day average,” he told CNBC. “Signs of stabilization here could set the stage for the next leg higher and a definitive breakout to a new all-time high over the coming months to quarters.” Keller said he sees downside risk to between $50,000 and $52,000, based on both the 61.8% retracement of the first-quarter rally and the 200-day moving average. Geoff Kendrick, Standard Chartered’s head of digital asset research, echoed that view, saying bitcoin’s “proper break” below $60,000 has “re-opened a route to the $50,000 to $52,000 range.” Wolfe Research’s Rob Ginsburg said $60,000 bitcoin looks “vulnerable” and that $50,000 could be in play. Bitcoin traded in a range between $60,000 and $74,000 since mid-March, when the cryptocurrency reached new records, and has failed multiple times to break out. Investors have been expecting choppy trading in the weeks ahead, now that key catalysts such as the introduction of bitcoin ETFs in the U.S. and the halving have passed. “With the latest Bitcoin halving now behind us, it’s worth noting that bitcoin has often sold off in the month after the halving, but the 12 months post-halving have included some of the most bullish upswings in history,” Keller said. “We expect short-term weakness here to precede a strong move to new all-time highs later in 2024.” —CNBC’s Michael Bloom contributed reporting.
