Bitcoin Loses Steam: Critical Support Zones Analysts Are Monitoring
Declining Bitcoin momentum after retreat to $76,000 has analysts cautioning that breaking below critical $74,000-$76,000 support zone may spark more significant BTC price decline.
According to market experts, Bitcoin (BTC) is demonstrating signs of "momentum exhaustion" following an 8% decline from recent multi-month peaks above $82,000, with market bulls anticipated to protect critical support zones.
Key takeaways:
- Bitcoin momentum declines following price rejection at the $82,000 threshold.
- Market experts caution BTC may decline to $65,000 should support between $74,000-$76,000 break down.
Bitcoin's momentum showing signs of "weakening"
According to private wealth management firm Swissblock, Bitcoin's momentum is diminishing after the cryptocurrency failed to "sustain expansion" beyond the $82,000 level.
The firm indicated that Bitcoin's upward momentum has been declining in "force with every bounce," leading to the recent pullback to $76,000.
Currently, Bitcoin is changing hands at $77,200, with the true market mean alongside the short-term holder cost basis hovering around $78,000, which now serves as near-term resistance.
"Bitcoin is losing its capacity to regenerate strong positive momentum internally," the wealth manager said, adding:
"Momentum exhaustion is not the breakdown itself. It is the process that usually comes before it."
Supporting this assessment, market analyst Axel Adler Jr highlighted that Bitcoin's slow impulse performance indicator has "turned negative for the first time since April," adding:
"Momentum is fading exactly as macro pressure is rising. Without Slow back above zero, every rally is unconfirmed."
Additionally, Bitcoin's price momentum indicator has also dropped substantially, declining by 29% during the past week to 47.1 from 66.7, signaling a "shift from strong upward to weakening momentum," according to Glassnode in its most recent Market Pulse report, adding:
"Bitcoin's market structure is beginning to soften as momentum, spot demand, and speculative positioning weaken across the market."
Critical Bitcoin support zones under observation
According to Cointelegraph's previous coverage, Bitcoin's potential upside depends on market bulls maintaining the price above the $74,000-$75,000 region, given it has consistently functioned as crucial support during the past two years.
This zone is where critical moving averages converge, including the 50-day exponential moving average (EMA), the 100-day 100-day EMA and the 50-day simple moving average (SMA), as demonstrated in the chart below.
This underscores the significance of this demand area and the reality that BTC/USD has yet to fall below it, "may be the most bullish thing" for Bitcoin, according to trading resource Material Indicators in a recent X post.
The secondary zone of interest sits between $72,000 (100-day SMA) and the psychological threshold at $70,000.
Should this support level fail, BTC price may decline to $65,000 or potentially revisit the macro low beneath $60,000, which was reached on Feb. 6.
Market analyst Daan Crypto Trades Bitcoin indicated that should the support between $75,000-$76,000 break down, the BTC/USD pair would revisit the $72,000 "level pretty quickly."
Taking a broader perspective, market trader CryptoAmsterdam stated it would be "good" should the BTC/USD pair maintain support between $74,000-$76,000 (the orange area on the three-day chart below) with additional defense zones located around $72,000.
The market expert establishes downside objectives at $60,000 and $50,000 should these support zones be compromised.
According to previous Cointelegraph coverage, a crucial support threshold for the bulls was the 50-day SMA at $75,600, which, should it be lost, may result in the BTC/USDT pair dropping to $65,000.