Bitcoin (BTC) fell sharply last night, falling to its lowest level in the last two months.
The price of the coin dropped below $26,000, breaking a key support level and triggering selling. Analysts say the decline could continue as Bitcoin faces rising interest rates, a stronger dollar, and SpaceX rumors selling its BTC holdings.
The decline began Thursday night when news emerged that SpaceX, the space research company founded by Elon Musk, has reduced its BTC investment and sold some or all of its holdings.
“Unfortunately, the situation for Bitcoin, like most risk assets, still looks very worrisome,” Rob Ginsberg, technical analyst at Wolfe Research, told CNBC.
“You never know what the momentum will be, but as we discussed in our note earlier this week, the worsening trend and momentum was pointing to a significant bearish for Bitcoin.
It is currently oversold and we are close to some relief with key support between $24,750 and $25,000. But first we may have to fall one more time. Looking ahead, I wouldn't be surprised if it tests $20,000 before the end of the year, after a dead cat bounce.”
Julius De Kempenaer, technical analyst at StockCharts.com, said that if Bitcoin continues its losses, it will follow the March 2023 low of $19,500 as the next target.
“With the upper and lower bounds becoming more and more evident, the most likely scenario in the near term is for BTC to continue to fluctuate between 25,000 and 30,000.
However, if it does rise, $48,000, the high of March 2022, is likely.”
Ari Wald, head of technical analysis at Oppenheimer, similarly said that the drop is “indicative of a trend that has changed from an uptrend to a horizontal range.” He noted that he sees $24,770 as the next level of support to watch. He identified the upside target as $27,300, the 200-day moving average.
Katie Stockton of Fairlead Strategies has set the next downside target at a slightly higher level of $25,200 and a secondary target level of $20,600. “Our short- and medium-term indicators are bearish, while long-term indicators continue to improve (but not positive),” Stockton said.
“The structure supports the $25,200 breakout, which will further increase the downside risk for BTC.”
*Not investment advice.
