Bitcoin loses key support level, but analyst says ‘don’t freak out’

Key Takeaways

• Bitcoin briefly fell below its 200-day EMA, a key support level for traders.
• Analysts predict potential price movements between $56,000 and $60,000 in the near term.

Bitcoin (BTC) briefly lost its 200-day exponential moving average (EMA 200) this Thursday, which is considered very important support for BTC by traders. Despite the brief loss of this fundamental price level, the analyst who identifies himself as Altcoin Sherpa told his followers to “don’t freak out” as it is “quite common for the EMA 200 “to get lost for a bit.”

“It’s likely that we see some sort of bounce around here down to 56k. Expecting a lot of volatility and this should be an entry area. but tbd if this is ‘the bottom’,” wrote the analyst. He added that it is important to see how strong the bounce is, the price could be back at the $60,000 price zone. However, an unsustained movement might take Bitcoin back to $56,000 and steal its momentum.

Fellow trader Michaël van de Poppe highlighted that BTC is hunting the liquidity gaps created by future contracts traded on the Chicago Mercantile Exchange (CME). After liquidating positions around $60,000, Bitcoin went down to the gap around the $56,000 area. In his annotations, van de Poppe considered the possibility of BTC going as low as the channel between $50,000 and $52,000.

Furthermore, the trader identified as Rekt Capital pointed out a reversal in Bitcoin’s latest breakout. As reported by Crypto Briefing, the trader was optimistic about BTC overcoming its June downtrend. Yet, it failed to sustain the previous downtrend line as support.

Notably, Rekt Capital shared that the current pullback is 21% deep with a 45-day duration. Although it is within the average retrace depth, which is 22%, the duration is over the 42-day average.