Following a brief recovery period, Bitcoin (BTC) is trying to rebound from a significant level to regain the $110,000 support. However, some analysts propose that a retest of the $90,000 range could be the next target for the cryptocurrency.
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Bitcoin Touches Weekly Lows
For the first time in nearly two months, Bitcoin has dropped below the $110,000 support, falling beneath the local range’s lower boundary of $108,700-$119,500. The leading cryptocurrency reached an eight-week low of $107,900 on Friday afternoon, raising concerns about its short-term recovery among investors.
Crypto analyst Ali Martinez indicated that the market is beginning to show signs of exhaustion, with Bitcoin Dominance revealing weaknesses after driving most of the bull market’s momentum.
According to the analyst, BTC’s current price behavior suggests a macro trend change, reflecting the price movements of 2021 and the circumstances that preceded the peak of that cycle. Back then, the cryptocurrency peaked at $60,000 in April, pulled back, rose to $70,000, and displayed a strong bearish divergence against the Relative Strength Index (RSI) before entering a bear market.
Currently, Bitcoin is displaying a similar pattern that hinted at the conclusion of the previous cycle, with prices achieving higher highs while the RSI records lower lows, as explained by Martinez.
In addition to other technical indicators, the analyst noted that the MACD indicator turned bearish this week. He explained that this bearish crossover corresponds with the recent price decline, emphasizing the risks of further downside.
Additionally, he mentioned that the recent death cross in the Bitcoin MVRV Momentum indicator “indicates a macro momentum shift from positive to negative. This is historically a reliable signal of market peaks.”
The analyst reaffirmed that on-chain data suggests Bitcoin’s peak may have been reached, at least temporarily, with a bearish bias taking hold and the potential for retesting lower support levels.
Will BTC Repeat Its 2021 Decline?
Martinez also highlighted the importance of the $108,700 support for BTC’s short-term trajectory, as a weekly close below this threshold could signal a more profound trend shift similar to what transpired in 2021.
After hitting a peak in late 2021, the leading cryptocurrency lost its local range above $58,000, which led to a retest of the mid-zone of the macro range, ultimately resulting in a drop beyond the macro range’s lows in the subsequent months.
Should BTC breach its immediate technical support, it could revisit the $104,500 and $97,000 support levels, endangering a decline to the mid-zone of the macro range, approximately around $94,000.
Altcoin Sherpa commented on the cryptocurrency’s outlook, asserting that Bitcoin should have solid support in the $103,000-$108,000 range, with the 200-day Exponential Moving Average (EMA) lingering around the $104,000 mark.
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However, analyst Ted Pillows believes that $124,000 looks to be the local peak. He elucidated that, historically, Bitcoin’s lows are reached after a retest of the weekly 60 EMA, currently positioned around the $92,000 support area, which has a CME gap.
“In this scenario, Bitcoin is projected to start a reversal after 3-4 weeks, aiming for a new ATH by November/December,” Ted remarked.
At the time of writing, Bitcoin is trading at $107,947, reflecting a 7.5% dip over the week.
Featured Image from Unsplash.com, Chart from TradingView.com
