Once again, Bitcoin (BTC) has started to slip. After trading above the key $7,000 support for days on end, the cryptocurrency slipped on Monday, tumbling to $6,800, then $6,700 on Tuesday, and then $6,500 on Wednesday morning.
The cryptocurrency has since bounced, rallying as high as $6,900 as bulls try and reclaim the key levels in this region to form a reversal uptrend.
Despite this move, this move has left some worried that the macro downtrend formed in June/July remains intact.
Cryptocurrency trader “Crypto Bullet” recently noted that with this latest drop, Bitcoin has come on the verge of breaking down from very key price levels.
One such level noted that Bitcoin is approaching an uptrend formed on its one-month logarithmic chart that has been important for more than seven years. As Bullet depicted in the chart below, the logarithmic uptrend is so perfect that BTC has bounced off that level some eight times, always marking a strong bottom which was led by a reversal.
Well, with Bitcoin’s recent decline to fall under $7,000, the price of the cryptocurrency has approached the trend line, which currently sits in the low-$6,000s.
Due to the curve’s historical importance to the cryptocurrency market, it is heavily implied that Bitcoin will need to hold this price level to maintain its ongoing secular bull market, which has made BTC the world’s best-performing asset over the past decade. As Bullet wrote, Bitcoin is doomed if it breaks below $5,800
Will it Hold?
The question then remains: will Bitcoin hold this level?
Unfortunately, some are fearful it won’t.
Two analysts have asserted that this latest move to the downside has validated their theories that a full-on capitulation in this nascent market is imminent.
Trader “FizeekMoney” recently noted that the daily on-balance volume chart for the BTC-to-USDT chart on Binance is “screaming [that] capitulation is on the horizon” for Bitcoin. Backing his quip, he looked to the below chart, which shows that the cryptocurrency has lost a support line, implying that bears are gaining control.
Cryptocurrency trader Nick Core echoed this, remarking that if the on-balance volume, an indicator that relates price action to exchange volume, closes under 1.405 million (and it did), “it signals disaster” for the short-term to maybe medium-term price outlook for BTC.