Bitcoin prices have been encountering some difficulty lately, falling more than 15% between yesterday and today amid a broader market sell-off.
The world’s most prominent digital currency declined to as little as $31,035.49 this morning, CoinDesk data shows.
At this point, the cryptocurrency was down roughly 15.6% from yesterday’s intraday high of $36,777.56, additional CoinDesk figures reveal.
Bitcoin suffered these declines at a time when the digital asset has been trading primarily between $30,000 and $42,000 since late May.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
In light of current market conditions, several technical analysts highlighted the crucial price levels that traders should watch.
Justin Hartzman, cofounder and CEO of cryptocurrency exchange CoinSmart, offered some perspective on this matter.
“On-chain metrics show that the SOPR (spent output profit ratio) is below one for Bitcoin, which means that traders are mostly selling their coins at a loss,” he stated.
“Given these selling patterns, the support level to watch is at $30,000.”
“If the bears take over, breaching $30k could trigger a deeper sell-off and cause a flurry of activity that will further depress prices,” said Hartzman.
“As such, all eyes will be on the $30k psychological level since the buyers could be targeting it as a potential entry point.”
William Noble, the chief technical analyst of research platform Token Metrics, also weighed in.
“There is a lot of support near 30.5 to 31k. If that breaks, a move to 24k could unfold.”
Julius de Kempenaer, senior technical analyst at StockCharts.com, offered similar input, emphasizing that “There is some intermediate support just below 30k.”
However, he noted that “the real level to watch is the former breakout level at $20k, which should provide major support for BTC in case of a drop that far.”
In addition, de Kempenaer cited another technical indicator, which helped paint a bearish picture for the digital asset’s short-term prospects.
“BTC is currently completing a breakout from a textbook symmetrical triangle which points to more downside price action in the near future.”
“For the time being the trend is clearly down while upside potential is very limited,” he stated, indicating that it’s “Not really an ideal situation to get back into this market.”
Katie Stockton, the founder and managing partner of Fairlead Strategies, LLC, offered a more bullish take on the subject, stating that:
“Today’s decline in bitcoin marks a retest of support in the $34K area – it is not a decisive breakdown, but it would become one if we see a couple of weak closes (today and tomorrow) at current levels.”
She added that “Oversold conditions are in place from short- and intermediate-term perspectives,” giving bitcoin “a better chance to find its footing.”
“Short-term momentum has deteriorated, but not to the degree with which we have a ‘sell’ signal in the daily MACD.”
“A recovery and subsequent close above the 20-day MA would be a bullish short-term development that would clear the path to the 50-day MA.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.