After Bitcoin surged above $ 52,600 on Wednesday, the price has now entered a downtrend. At the time of writing, the price dropped to $ 47,100 and therefore entered an area that made Bitcoin vulnerable to losses.
As Rafael Schultze-Kraft, co-founder and CTO of analytics firm Glassnode points out, there is strong support at $ 47,000: about 500,000 BTC moved at this level. According to the CTO, it is very important to maintain this level, otherwise we can test the lower levels before the next upward move comes.
However, Scott Melker, one of the famous analysts, shared the table below with 245,000 followers on Twitter, saying “What if?” asked. The analyst hinted that the Bitcoin price could behave as it did during the correction earlier this year. According to this assumption, the bottom has not yet been reached. In January, there was a 31.6% correction from the local high with 187 candles on the 4-hour chart. If this repeats, BTC could drop to $ 40,000 and extend the correction until the end of March.
In addition, Bitcoin’s relationship with the S & P500 reached its highest level since the collapse in March 2020. Yesterday’s speech by US Federal Reserve Governor Jerome Powell also attracted great attention. With Powell’s statements, an upward movement in US 10-year bond yields came, while Bitcoin and stocks fell.
For now, institutional interest appears to have declined on the Bitcoin side. But in addition to the general sentiment in the Bitcoin market, institutions and large investors may continue to be a bullish factor in the long run.