Bitcoin Price Has Dropped 50% from its all-time high. What's Next? Technical Analysis
- Feb 16
- 3 min read
In this post, we will closely examine Bitcoin's price development through the lens of technical analysis and provide an outlook on its potential progress in the coming days and weeks.
Monthly Bitcoin Price Development
Since reaching an all-time high, its price has decreased by about 50%. The sharp decline was halted by strong monthly support and the 50-day EMA. We now need to observe how the price reacts at this level. On the monthly chart, a quick recovery doesn't seem likely. However, from a long-term perspective, it presents a good opportunity for buying and holding. Utilize DCA instead of making a one-time purchase.
Weekly Bitcoin Price Development
At present, we are experiencing a significant downtrend, trading below the 20 EMA Monthly, 20 EMA Weekly, 50 EMA Weekly, and 100 EMA Weekly. Although a correction may occur, these averages will serve as strong resistance levels.
Over the next few weeks, we anticipate trading within the range of $65,000 to $85,000.
Daily Bitcoin Price Development
On the daily chart, we are rebounding off monthly support. We need to observe how the market evolves to determine whether the support will hold, allowing us to rise, or if the market will gradually break the support, opening the possibility for further decline.
Optimistic Outlook for the Coming Days
In an optimistic scenario, we expect robust monthly support to sustain the price, prompting an upward rebound. As the price ascends, it is likely to face resistance from daily moving averages. Significant resistance from the monthly and weekly timeframes will be challenging to break, so the market is likely to struggle around this price level, remaining in a range below $85,000 for several days. Whether this level will be broken depends on market conditions.
We anticipate that the price will decrease again and will not break through on the first attempt.
The market is expected to stay within a range, with resistance close to $85,000 and support near $65,000.
Pessimistic Outlook for the Coming Days
We need to observe how the market behaves in the next few days, as this period will be crucial in determining the short-term trajectory of asset prices. Monitoring the movements and trends within this timeframe will provide valuable insights into market sentiment and investor confidence. If we notice that the market breaks down through the established support levels, which are critical price points where buying interest tends to emerge, we can anticipate a further decline in price.
Conclusion
After the market dropped by more than 50%, it is evident that recovery will take considerable time, and no quick gains are anticipated in the near future. Such a significant decline typically indicates a market correction, which often leads to prolonged periods of consolidation before any signs of recovery emerge. The market is likely to remain within a defined range for an extended period, gradually settling into a new equilibrium as investors reassess their positions and strategies in light of the recent downturn.
Short-term
For short-term traders, the current market conditions strongly favor short positions. The ongoing downtrend suggests that many assets are likely to continue declining, creating a tough environment for those aiming to profit from rapid price changes. The general sentiment among traders and investors is negative, marked by caution and skepticism. Without the emergence of positive news, this statistically presents a good opportunity for short trades.
Long-term
On the other hand, in the long-term, we see a distinct opportunity for investors to gradually start acquiring Bitcoin at a considerable discount of 50% from its all-time high. This can be effectively achieved through dollar-cost averaging (DCA) strategies, which involve making regular, incremental Bitcoin purchases, such as weekly. By consistently investing a set amount, investors can reduce the impact of market fluctuations and avoid the risks if the market continues to decline.
This content is for informational purposes only and should not be taken as solicitation, recommendation, endorsement or investment advice. It is crucial for you to conduct your own research and due diligence to make informed decisions, as any investment will be your sole responsibility. Please review our disclaimer and risk warning.