Bitcoin’s Dramatic Plunge: Will Buyers Emerge from the Shadows?

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Well, well, well! It appears we are witnessing a rather spectacular weekly candle, and not the kind one would want to light for a romantic dinner. No, this is a gargantuan affair, currently plummeting downwards like a lead balloon at a particularly dreary party. With a staggering 18% drop this week, that translates to a loss of $18,000—enough to make even the most stoic investor weep into their morning tea. And as for the $BTC price, it seems to be flirting with the idea of abandoning the 200-day moving average, much like a wayward spouse at a family reunion. The burning question on everyone’s lips is: where, oh where, will the buyers come back into this market? 🤔

Crypto Price Sentiment: A Comedy of Errors

For those seasoned veterans of the crypto market, this current nosedive is merely a Tuesday. After all, even the most robust bull markets can take a tumble of 40% to 50%—it’s practically a rite of passage! However, for the fresh-faced investors who’ve just dipped their toes into this wild world, it must feel as though the sky is indeed falling, and many are likely selling off their assets faster than a cat can knock a glass off a table. 🐱💨

Despite Bitcoin basking in the glow of the most crypto-friendly US administration in history, the price action resembles a scene from a horror film. Market sentiment is tanking faster than a lead weight in a swimming pool. At what price point will this torrent of selling finally be brought to heel? One can only speculate! 🎭

$BTC Price: A Dramatic Break Below the 200-Day Moving Average

With such a catastrophic price plunge still unfolding, it’s about as useful to look at the shorter-term price charts as it is to consult a fortune teller at a carnival. Starting off on the daily, one can observe that the price has broken down through the 200-day SMA, which, under normal circumstances, would be a line that the majority of the bull market price would cling to like a lifebuoy in a storm. 🚢

The Fibonacci levels, drawn from the very bottom wick of the 8-month long bull flag to the all-time high, have been acting as a reliable magnet for the price thus far. Currently hovering at the 5.0 Fibonacci, the price seems to be taking a breather while the previous big moves down are digested by the market. It does appear that the drop might continue, given the confluence below with the 0.618 Fibonacci and the rather robust support level formed by the top of the bull flag. 🍽️

Three Main Levels of Support: A Comedy of Supports

The above weekly chart reveals that there are three main levels of support lurking beneath the $BTC price like a trio of disgruntled butlers. The first level of support is a tad perfunctory at $80,000, but it also coincides with the 5.0 Fibonacci, so there’s a chance the price could bounce here, much like a rubber ball in a game of cricket. 🏏

Below this, we have the $74,000 level, which marks the very top of the bull flag. A confirmation here before turning back around could also be a rather valid move. That said, the strongest—and perhaps more likely—level to plummet to would be the $69,000 horizontal support level. This not only marks the apex of most of the candle bodies in the bull flag but also the very pinnacle of the 2021 bull market. A 37% retracement from the top would be a very, very healthy retest for the bull market going forward. One further factor to consider is that the M topping pattern has a measured move down to $70,000. 🏰

Will the price descend to either of these lower levels? Ah, the million-dollar question! Nobody knows, dear reader. These are merely two scenarios to add to the one where the price stops falling right now and decides to head back up, perhaps for a nice cup of tea. ☕

What is abundantly clear is that none of these scenarios point to a bear market. It’s all about the formation of a healthy price structure, ready to lay the groundwork for the next stage of the bull market to be built upon it. And that, my friends, is the crux of the matter! 🎉

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2025-02-28 14:13