Bitcoin plunges below $55,000: Can it hold $52,000?Bitcoin has experienced a recent decline, falling below $55,000 and testing a demand zone not seen since August. While this break has sparked market concerns, some analysts believe a support level might exist around $55,000, potentially pushing prices back towards $58,000
Bitcoin plunges below $55,000: Can it hold $52,000?
Bitcoin has experienced a recent decline, falling below $55,000 and testing a demand zone not seen since August. While this break has sparked market concerns, some analysts believe a support level might exist around $55,000, potentially pushing prices back towards $58,000. However, if Bitcoin breaks below $52,000, it faces greater bearish pressure and could even retest the 50-week moving average, posing a significant threat to the long-term bullish structure.
$55,000: Key Support or Temporary Dip?
Bitcoin hit a monthly low of $55,250 on September 6th, but subsequently rebounded, forming a higher low on the 1-hour chart. This could imply a potential short-term bounce back to $57,500. Additionally, a bullish divergence between price and the Relative Strength Index (RSI) was observed on the 4-hour chart on September 4th.
However, if Bitcoin fails to hold $55,000, it may experience further declines and retest the $52,100 level. Axel AdlerJr., a Bitcoin researcher, suggests this level represents the current realized price for short-term holders, making it a potential point of support.
$52,000: Realized Price for Short-Term Holders and a Key Resistance
If Bitcoin breaks further below $52,000, it faces increased bearish pressure and could target the $49,000 support level. This zone saw significant whale accumulation starting in February 2024, potentially offering some support.
Nevertheless, if Bitcoin plummets below $49,000, it would retest the 50-week moving average, a level it hasn't closed below since October 2023. This break would seriously jeopardize the long-term bullish structure.
Historical Perspective and Future Outlook
During the 2021 bull run, Bitcoin maintained its position above the 50-week moving average on a weekly basis. This indicator offered support before the second leg of the surge. Currently, the RSI has reset near the 50 level, similar to 2021.
If history repeats itself, Bitcoin should avoid prolonged consolidation below $50,000, as it would result in weekly closes below the crucial EMA level. Ultimately, a revisit to the bottom around $49,000 is likely in the second half of 2024 before the bull cycle resumes.
Conclusion
Bitcoin currently faces bearish pressure, but a support level could exist around $55,000, potentially leading to a rebound towards $58,000. However, if Bitcoin breaks below $52,000, it faces greater bearish pressure and could even retest the 50-week moving average, posing a significant threat to the long-term bullish structure.
Disclaimer: This material does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making any decisions.
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