Bitcoin is currently grappling with the challenge of sustaining its bullish momentum amid the fallout from Mt. Gox reimbursements, which have triggered the most significant wave of sell-offs in years.
On July 5, the price of Bitcoin (BTC) dropped by 5%, based on data from Cointelegraph Markets Pro and TradingView. As a result, traders are now closely monitoring critical support levels that bullish investors must defend.
Matthew Hyland, a well-known trader, has identified the $52,000 mark as the primary support level to watch. This level corresponds to the lower boundary of Bitcoin’s supertrend indicator on weekly charts, which has served as a foundation for pricing since Bitcoin’s all-time high of $73,800 back in mid-March.
The supertrend indicator utilizes the average true range to establish a dynamic trend line that helps delineate optimal buy and sell points for BTC/USD. Bitcoin has remained above this supertrend line since the conclusion of its last bear market at the end of 2022.
Historically, Bitcoin has experienced several drawdowns of up to 38% since 2016, with the current pullback still considered moderate in comparison. Analysts suggest that if the downturn persists, the potential capitulation target could be around $45,750.
Adam Back, CEO of Blockstream, criticized the volatile sentiment in the market, urging long-term investors (hodlers) to consider increasing their exposure not only to Bitcoin but also to MicroStrategy, a company that holds the largest Bitcoin treasury among publicly traded firms.
Commenting on the ongoing market dynamics, Rekt Capital, another prominent analyst, noted that the current retracement, which has seen a 21% decline over 45 days, is within the historical norms of Bitcoin’s market cycles. He highlighted that such retracements typically last about 42 days with an average depth of 22%.
Looking ahead, both analysts agree that Bitcoin’s price history appears to be repeating itself, suggesting potential resilience despite short-term setbacks.
It’s important to note that this article does not provide investment advice. All investment decisions involve risks, and readers should conduct their own research and assessment before making any financial commitments.