According to technical analysis, the firm bull market that Bitcoin has found itself caught within throughout January and February has officially come to a close, as the benchmark crypto has now declined below a critical support level that was an integral part of its bullish market structure.
One well-respected crypto-focused economist is now noting that the crypto’s break below this level is likely to lead it significantly lower before it is able to find significant support.
On the flipside, if bulls want to rekindle the dying bull trend, it is imperative that they recapture BTC’s position above $8,500, although this may prove to be an arduous task as its technical strength degrades.
Bitcoin Just Broke a Critical Level, Invalidating Its Bull Trend
At the time of writing, Bitcoin is trading down over 3% at its current price of $7,600, which marks a notable decline from daily highs of $8,150 that were set yesterday when bulls attempted to catalyze some upwards momentum.
This attempt failed, however, subsequently leading BTC to plummet below its key support at $7,700, which has appeared to invalidate its firm 2020 uptrend and has opened the gates for it to see significantly further downside.
Alex Krüger, an economist who focuses primarily on cryptocurrency, spoke about this break down in a recent tweet, telling his followers that it marked a firm end to the recent 2020 uptrend.
“Technically, below 7700 the BTC 2020 bull trend is over. The next levels are the 7400-7200 area, 6800 and 6400. Above 8500 it’s back to bullish territory. That said, I think this time and for the first time the macro is more important than BTC’s technicals,” he noted.
Technically, below 7700 the $BTC 2020 bull trend is over. The next levels are the 7400-7200 area, 6800 and 6400. Above 8500 it’s back to bullish territory. That said, I think this time and for the first time the macro is more important than BTC’s technicals. pic.twitter.com/0UYLq8JLKd
— Alex Krüger (@krugermacro) March 11, 2020
BTC’s Macro Outlook Grows Increasingly Bleak
Many analysts are quick to point to the cryptocurrency’s macro uptrend as a reason why investors shouldn’t get too concerned about short-term downtrends.
Despite this, Krüger believes that BTC’s macro outlook is growing increasingly bearish, referencing a thread from his alt account in which he explains that its status as a risk-on asset places it in a precarious position.
“I’m not trading bitcoin positionally any longer. It’s feasible this week changes everything. Investors are now looking to de-risk. Hard to imagine the halving narrative attracting much new money as things stand,” he explained.
I’m not trading bitcoin positionally any longer.
It’s feasible this week changes everything.
Investors are now looking to de-risk.
Hard to imagine the halving narrative attracting much new money as things stand.https://t.co/KCQbUopW3B
— Alex (@classicmacro) February 28, 2020
Unless bulls somehow garner an immense amount of buying pressure that invalidates the ongoing downtrend, it is highly probable that Bitcoin will see further near-term downside.
Featured image from Shutterstock.
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