Bitcoin (BTC) recently fell below a multiweek trading range and may suffer deeper losses if buyers fail to defend key support, according to technical analysts. The leading cryptocurrency by market value dropped over 3% on Monday, confirming a breakdown of a three-week long-range play between $29,500 and $32,000. Since then, the downside has been limited around the widely tracked 50-day simple moving average (SMA) at $29,140.
Fairlead Strategies’ founder and managing partner Katie Stockton warned that the outlook could worsen if the support level gives away. Two consecutive daily closes below the 50-day MA (~$29.0K) would increase downside risk back to long-term support near $25.2K, Stockton said in a note to clients late Monday. Chart analysts consider the last traded price at 23:59 UTC as the daily close to confirm the reliability of technical breakouts/breakdowns. Stockton noted that the weekly chart indicators suggest potential for a move below the 50-day average. A breakdown appears likely given an overbought downturn in the weekly stochastics. Also, the weekly MACD is pinched towards a ‘sell’ signal in another possible setback if it confirms, she said.
Alex Kuptsikevich, the senior market analyst at FxPro, stated that the market seems to have found an equilibrium ahead of the major central bank rate decisions, but risks of deeper drawdown persist. If bearish pressure intensifies [below 50-day SMA], the next significant support level would be $27,000, the lower boundary of the rising channel from the November lows and the 200-week moving average, Kuptsikevich added.