Bitcoin, the top cryptocurrency based on market capitalization, recently experienced a significant decline to below $67,000 after reaching $71,000 last week. This sudden drop has caused concern among traders. Well-known trader and analyst BlockchainedBB conducted a thorough analysis to explain the current situation and potential future scenarios for Bitcoin ($BTC).
$BTC Falls Below 67K – Should You Be Concerned? Long or Short?
BlockchainedBB provided a detailed update specifically for traders, emphasizing that there have been no changes for investors. The analysis highlights that Bitcoin is still holding above crucial support levels, including the 55, 100, and 200 daily Exponential Moving Averages (EMAs). Maintaining a position above the 55 Daily EMA is crucial to prevent a bearish trend. The market outlook remains positive as long as Bitcoin stays above $66,222 on the daily chart.
According to BlockchainedBB, Bitcoin is currently trading within the range of $66,000 to $69,000. A daily close below this range could signal a bearish trend. Reclaiming the 200 EMA on the 4-hour chart and retracing back to it could present a favorable opportunity for a swing long position. However, current volume and market catalysts are not sufficient for a new long position. A close below the 55 Daily EMA might trigger a short position with a target of $63,000.
Potential factors such as lower-than-expected CPI numbers or a dovish stance from the Federal Reserve could lead to a rally, pushing Bitcoin up to $74,000 by June 22. Despite the recent drop, institutional investors like BlackRock have been accumulating Bitcoin after selling off in March, indicating a possible temporary setback rather than a prolonged decline.
On-chain data and market sentiment suggest bullish potential for Bitcoin. Miners are holding onto their BTC post-halving, a positive signal for the market. The majority of traders are still in long positions, and options data shows more call options than puts, with a maximum pain price at $69,000, indicating a potential price target.
BlockchainedBB stressed that Bitcoin is currently in a secure position above $66,000. To maintain a bullish outlook, traders should monitor Bitcoin’s ability to reclaim the 200 EMA on the 4-hour chart. A bearish scenario could unfold if Bitcoin drops below $66,000, potentially leading to a short position with a target of $63,000.
As traders await the Federal Reserve’s decision and CPI data, caution is advised. It is essential to monitor key levels and indicators to make informed decisions. Conducting thorough research (DYOR) before investing in any cryptocurrency asset is highly recommended.
