Analysts are focusing on a key price level and what a fall below that level might mean for the bulls.
After Bitcoin fell back below $87,400, the support level of $82,000 has become the focus of the market. Analysts warn that if it breaks below this level, it could push this cryptocurrency down to the $77,000 range.
If it can hold within the range of approximately $81,500 to $83,000, it may help to maintain the bullish momentum of Bitcoin and support it to return above $90,000; some analysts even expect it to rebound to $100,000.
Rising yields on U.S. Treasury bonds, continuous outflows from spot Bitcoin exchange-traded funds (ETFs), and the upcoming inflation data may determine whether this upward trend is a restart or if a more significant pullback will prevail.
The upward trend of Bitcoin ( BTC ) at $83,023.80 has stalled, and a few analysts suggest that a certain price level will determine whether the next move will be upwards or downwards.
The world's largest cryptocurrency once rose above $87,400 on September 21. Since then, it has continued to fall, testing the range between $82,000 and $83,000. This area is very important because Bitcoin peaked here in May, before then falling to around $57,000 in June.
Bitcoin is currently still trading near this level. Most market observers expect it to rise again soon, while some predict it will rebound to $100,000.
However, there are also some analysts focusing on a bearish scenario, which begins once the price falls below $82,000.
From a trading perspective, $82,000 is a support level, which means that the buying pressure is expected to exceed the selling pressure at that price point. Old resistance levels often become new support levels. Bitcoin struggled to break through $82,000 in May and early September. Once it finally did so, this level became a defensive line that buyers needed to hold onto.
"The level that needs attention is $82,000," said Jeff Anderson, the head of the American operations for the cryptocurrency trading company STS Digital. He mentioned the double top pattern formed at that level, which is an "M" shape that occurs when the price touches the same high point twice but fails to break through it each time.
"After falling below that level, the price is likely to rebound back to the high range of $79,000," said Anderson.
However, he does not believe that a decline necessarily means the end of this upward trend. Inflation in the United States and the unstable confidence in the U.S. government's debt are factors that tend to be favorable for Bitcoin in the long run. "Any such pullback will be well-supported," he said.
Anderson believes that the recent weakness is stemming from the bond market, rather than Bitcoin itself. The prices of U.S. Treasury bonds are falling, while yields are rising. When the yields on safe government bonds increase, risk assets such as cryptocurrencies become less attractive.
"The current weakness this week is a direct result of disordered yields in the market and a surge in volatility in the fixed-income sector," said Anderson. "At the current pace, it seems that government bonds will continue to be sold off until the stock market finally collapses!"
Research analysts Bitget Wallet and Lacie Zhang believe that the range of $81,500 to $83,000 is a critical area.
"Maintaining control over this area will preserve the constructive nature of the market structure," said Zhang.
She stated that if this area is lost, it would be one of the three warning signs she is concerned about. "If the ETF capital flow turns net outflow for several consecutive trading days, the yield on 10-year U.S. Treasury bonds continues to rise, and the support below $82,000 is broken, the likelihood of a deeper correction will increase," she said.
ETF The tracking of capital flow focuses on the inflow and outflow of funds from American exchange-traded funds that hold Bitcoin. A continuous net outflow indicates that large amounts of capital are withdrawing.
Nexo Dispatch analyst Iliya Kalchev sets his own stop-loss level a bit lower. 'If it continues to fall below $80,000, it will indicate that the market is not ready to continue rising for some time,' he said.
However, a rebound could still change the situation. "If momentum is regained from here, prices could exceed $90,000," said Kalchev.
The next test may come from economic data, rather than charts. Anderson indicates that the Personal Consumption Expenditures Price Index ( PCE ) – the inflation indicator favored by the Federal Reserve – “will become the next guide for the market to determine how long inflation may remain high.”
