Bitcoin, the leading cryptocurrency by market capitalization, has seen a significant drop below $67,000 after touching $71k last week. This has sparked serious fear among traders. Renowned trader and analyst BlockchainedBB provided an in-depth analysis outlining the current situation and potential future scenarios for Bitcoin ($BTC).
Key Support Levels Hold for Bitcoin Amid Market Volatility
BlockchainedBB reassured traders that BTC is still above key support levels, namely the 55, 100, and 200 daily Exponential Moving Averages (EMAs). As of now, BTC has not flipped bearish as long as it holds above the 55 Daily EMA. The market structure remains bullish as long as BTC stays above $66,222 on the daily chart.
As per the analyst, BTC is still within the first green box of $66,000 to $69,000. A daily close below this range could indicate a bearish flip. If BTC reclaims the 200 EMA on the 4-hour chart and retraces back to it, it might be a good entry point for a swing long position. However, current volume and catalysts are insufficient for a new long position. If BTC closes below the 55 Daily EMA, it could trigger a short with a target of $63,000.
Lower-than-expected CPI numbers or a dovish stance from the Federal Reserve could spark a rally, potentially pushing BTC up to $74,000 by June 22. Despite the recent drop, institutions like BlackRock have been reaccumulating BTC after selling off in March, indicating a possible shakeout rather than a prolonged downturn.
On-Chain Data and Market Sentiment Indicate Bullish Potential for $BTC
On-chain data shows that BTC remains above the short-term realized price, which is a bullish sign unless it drops below this level. Miners are holding onto their BTC post-halving, which is a positive indicator. The majority of traders are still in long positions, and options data shows more call options than puts, with a max pain price at $69,000, suggesting a possible price magnet.
BlockchainedBB emphasized that BTC is currently in a safe zone above $66,000. For a bullish outlook, traders should look for BTC to reclaim the 200 EMA on the 4-hour chart. A bearish shift might occur if BTC drops below $66,000, setting up for a potential short position with a target of $63,000.
As the market awaits the Federal Reserve’s decision and CPI data, traders are advised to remain cautious and watch for key levels and indicators to guide their next moves. It is recommended to DYOR before investing in any crypto asset.
