Bitcoin (BTC) price has declined by more than 8% over the last three days after rallying to $72,000 at the start of the week.
Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin suddenly dropped from a high of $71,980 on May 21 to an intra-day low of $66,260 on May 23.
Bitcoin’s price drop coincides with an unexpected market response to the approval of the spot Ethereum exchange-traded funds (ETFs) in the United States on May 23. The approval’s sell-on-the-news effect has left market participants wondering how much deeper the drawdown can go before a sustained recovery is seen.
Let’s explore how low Bitcoin price can go in the ongoing corrective cycle.
Bitcoin could dip toward $60,000
Crypto trader and analyst Mags noted that BTC’s recent rally was rejected from the major resistance near the $73,835 all-time high, saying that the price is likely to consolidate near $65,000 before making another attempt at recovery.
“BTC is facing some resistance near the range high, expecting some consolidation near the mid-range ( $65,000 ) before another leg up.”
Fellow analyst George attempted to decipher whether the BTC price had reached a local bottom. Drawing comparisons to the recent correction from the March 14 all-time high, he said that the lows around $60,000 would be “a nice place to target or to look for longs.”
“It’s either from here or from the blue zone. It’s literally that simple.”
“Bitcoin is consolidating, and it’s within the range,” said MN Capital’s founder, Michaël van de Poppe, reacting to what has become a familiar event in short time frames for Bitcoin since the halving.
Van de Poppe explained that this includes dollar-cost averaging and capital rotation from Bitcoin to Ether (ETH), causing a longer sideways period.
“Probably that consolidation will be taking place for a longer period and I suspect we might see $61- 63K even.”
Bitcoin could retest the reaccumulation range low at $60,000
Bitcoin’s reaccumulation phase starts a few weeks before the halving and is associated with downside volatility occurring below the reaccumulation range. It ends with a breakout from it a few weeks later. This phase can extend up to 150 days, roughly five months, according to popular analyst Rekt Capital
With Bitcoin being rejected from the current reaccumulation range high of approximately $71,500, the analyst said the price of the flagship cryptocurrency may continue consolidating within the range extending from $60,000 to $70,000 for several more weeks.
“The consolidation continues, and history suggests it will continue for several more weeks between $60,000 and $70,000.”
Rekt Capital has previously explained that the range will be over once the BTC breaks out from it, entering a parabolic uptrend adding,
“The goal now is for Bitcoin to move sideways to catch a breather, for the market to cool off after fantastic Pre-Halving price performance.”
The 50-day EMA provides the first line of defense for Bitcoin
From a technical point of view, Bitcoin’s price was sitting on immediate support at $66,000.
Losing this support may cause the price to drop from the current levels, collecting the demand-side liquidity below it toward the 50-day EMA, currently at $64,838.
The 50-day EMA sits within Bitcoin’s key support zone between $64,000 and $66,120. After being held in March, this support preceded a 17% surge in price to $72,777 on April 8. According to IntoTheBlock’s IOMAP chart below, more than 870,800 BTC were previously bought by more than $1.42 million addresses within this price range.
Since this area provides relatively strong support for the BTC price compared to the resistance it faces in its recovery path, it could be where the downside is capped for the short term.