Bitcoin Price Analysis: Potential Plunge Below $60K Key Support Level Looms

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Bitcoin experienced a notable decline recently after breaking below the $64,000 support level.
As the cryptocurrency’s price ranges near a critical threshold, its short to mid-term trajectory hangs in balance.
“The 200-day moving average test could set the tone for Bitcoin’s market direction,” an analyst remarked.

Bitcoin’s dip under $64K raises questions about its future, with key support levels and moving averages in focus. Explore the technical analyses and possible outcomes as the market reacts.

Bitcoin Tests Key Support After Sharp Decline

Bitcoin’s price has faced substantial selling pressure, breaking below a crucial support level at $64,000. The daily chart reveals a double top pattern formation at the $68,000 resistance, which intensified the bearish trend. Consequently, Bitcoin is now at a pivotal juncture, testing the 200-day moving average. Should this level fail to sustain the price, a deeper correction toward the $52,000 mark is on the cards. The Relative Strength Index (RSI) also indicates bearish momentum, highlighting values below 50%.

Short-Term Optimism Amid Bearish Pressure

In contrast to the daily chart’s bearish outlook, the 4-hour chart offers a glimmer of hope. Bitcoin has shown resilience, bouncing off the $60,000 support with a prominent wick. It currently trades within a range of $60,000 to $64,000. However, market analysts predict another test of the $60,000 support zone. The ongoing struggle between support and resistance levels in this range will likely shape Bitcoin’s price trajectory in the short term.

Investor Behavior and On-Chain Metrics

Examining on-chain data provides further insights into Bitcoin’s market movements. The Short-Term Holder Spent Output Profit Ratio (STH SOPR) offers valuable clues regarding investor sentiment and behavior. The STH SOPR recently recovered above 1, indicating that short-term holders were realizing profits as the market rebounded from $55,000. However, the recent price drop has brought the STH SOPR close to 1 again, suggesting that short-term holders are now realizing marginal profits or minimizing losses. Persisting in this trend could lead to an overabundance of supply as investors aim to exit their positions with minimal losses.

Conclusion

Bitcoin’s recent price action underscores the importance of key support levels and moving averages in shaping its future direction. The ongoing battle between bullish optimism on short-term charts and bearish signals on daily charts creates an uncertain outlook. Investors will need to monitor these technical indicators and on-chain metrics closely to navigate the evolving market dynamics. Understanding and anticipating these movements are crucial as Bitcoin stands at a potential turning point.

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