Bitcoin encountered a substantial setback on October 11, erasing all the gains it had made in the month so far, with its price dipping below the crucial $27,000 mark. This downward trend sparked concerns among traders, who speculated that the $27,000 level might not hold for an extended period.
The decline in Bitcoin’s value was underscored by the emergence of a ‘death cross’ on the charts, a technical pattern where the 100-day moving average crosses below the 200-day moving average. This event, in contrast to the bullish ‘golden cross’ witnessed in March, typically signals a bearish market trend.
Examining the intraday performance, market analyst Skew highlighted the significance of the death cross, emphasizing that if the price continued to decrease, there could be a potential squeeze leading to a test of the 200-day moving average. Since the confirmation of the death cross on October 9, Bitcoin has experienced a notable loss of almost $1,000, equivalent to 3.4%.
On shorter timeframes, Skew identified $27,300 and $26,800 as critical levels to watch. He suggested that the bears currently had control over the price, and any recovery above $27.3K would be viewed as a display of strength. However, he cautioned that a recovery must be driven by spot activity, and a failure to hold above $26.8K would signify weakness.
Another prominent trader, Jelle, echoed these sentiments, emphasizing the importance of the $27,000 level. Noting that untapped liquidity had been exhausted, he expressed surprise at the lack of an immediate buyback, hinting at a possible inclination for the market to move lower.
The current behavior of Bitcoin’s price has led to conservative projections for its future trajectory. Analyst Rekt Capital, considering a potential long-term breakdown from the July highs, highlighted the absence of a macro higher low on the BTC/USD weekly chart compared to late 2022. He presented a target of around $20,000, drawing parallels with Bitcoin’s behavior in the pre-halving year of 2019.
This recent market turbulence has fueled speculation and diverse opinions on Bitcoin’s short-term and long-term prospects. As traders closely monitor key support and resistance levels, the cryptocurrency market remains dynamic and subject to various technical and macroeconomic factors.