Bitcoin Price Analysis: How Low Can BTC Go?

Overview

Bitcoin recently experienced an unexpected decline from the $29K mark, leading to a substantial breakdown of the pivotal 100-day and 200-day moving averages. This bearish trend has left many wondering just how low BTC can go. In this article, we will analyze the technical and on-chain aspects of Bitcoin to shed light on its potential price trajectory.

Technical Analysis

The Daily Chart

Following the drop from $29K, Bitcoin’s price fell below the critical 100-day and 200-day moving averages. However, it found support around the significant $25K level, leading to a bounce. This rebound was triggered by a favorable court ruling in the SEC-Grayscale case, which could potentially transform GBTC into a Bitcoin ETF.

Despite the initial bounce, Bitcoin retraced to retest the 200-day moving average and experienced another impulsive downward movement. The price once again reached the crucial support zone at $25K. While the current price action suggests a bearish sentiment, a potential re-confirmation of support could lead to another bullish rebound and a consolidation phase. Conversely, a dip below $25K could trigger a cascade of selling, pushing the price lower.

The 4-Hour Chart

Looking at the 4-hour timeframe, we can see that the downward trajectory halted around the $25K support region. The price briefly consolidated with low volatility before experiencing a sudden rebound, marked by a substantial green candle. However, as the price reached the critical 61.8% Fibonacci level, buying pressure weakened, resulting in a reversal. Bitcoin then retraced back towards the $25K range.

In the upcoming days, the $25K threshold acts as a significant psychological support level. If sellers manage to push the price below this mark, we may see another swift descent towards lower price thresholds.

On-chain Analysis

An on-chain metric called Miner to Exchange Flow provides insights into the volume of coins transferred from miners to exchanges, indicating potential selling pressures. Over the past months, price downturns have coincided with miners initiating the transfer of their Bitcoin holdings to spot exchanges.

Recently, there was a surge in miner activity when Bitcoin touched the $30K mark. This surge contributed to a significant price retracement, pushing Bitcoin’s valuation down to $25K. Subsequently, the metric experienced a dip, hitting a yearly low.

However, the metric shows signs of a slight rebound, suggesting the potential for renewed miner activity. Traders should closely monitor miners’ behaviors as they can significantly influence Bitcoin’s short-term trajectory.

Conclusion

Bitcoin’s recent decline below key moving averages has raised concerns about its price trajectory. Technical analysis indicates the possibility of another bullish rebound if support is re-confirmed, but a dip below $25K could trigger further selling. On-chain analysis highlights the importance of monitoring miner activity as it can provide insights into short-term price movements. Given the current market conditions, it is essential for traders to stay vigilant and adapt their strategies accordingly.