How Low Can Bitcoin Go?
Date: 2024-10-04 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
It has been a bad start to October for Bitcoin. In the first three days, the price fell from $66,000 to less than $60,000, dashing hopes for a rapid rally that many were expecting at the start of the month.
Despite the uptrend that has lasted for three weeks, a “bearish engulfing” pattern is forming on the Bitcoin weekly chart. This could indicate a long consolidation and further price decline before the price starts to recover again.
On September 27, Bitcoin closed the daily candle above the previous local maximum, forming a Higher High (HH) for the first time in five months. This change in market structure signaled the possible start of an uptrend. However, before Bitcoin can begin a new round of growth, it needs to form a Higher Low (HL).
Currently, Bitcoin is correcting from the demand zone located between $60,500 and $57,400. This area coincides with the 0.50-0.618 Fibonacci retracement levels, which traders often consider the “sweet spot” for opening long positions on higher time frames. Despite this temporary rebound, Bitcoin is facing resistance at the 200-EMA indicator, which increases the likelihood of further decline below $60,000 in the coming days.
Some analysts, such as independent trader Dentoshi, note that the loss of support at the 4-hour EMA-200 level could lead to further declines to $57,400, which is the lower limit of the “sweet spot”.
In addition, there is an unfilled gap at $54,000 on the CME Bitcoin futures chart. Such gaps have often been filled in Bitcoin's history, suggesting a possible return to this level. Thus, $54,000 could become a key support zone that will not disrupt the overall uptrend.
However, if Bitcoin continues to fall below $54,000, the likelihood of it falling below $52,510 will increase. In this case, the medium-term and possibly long-term bullish trend will be at risk.
