Watch these 3 BTC price levels if Bitcoin breaks below $55K

Bitcoin’s (BTC) price continues to face bearish pressure as the total cryptocurrency market cap slides under $2 trillion. The crypto fear and greed index also shows “extreme fear” in the market for the first time since the first week of August.

Let’s examine the BTC price levels below $55,000, which should provide support and potential bounce areas.

Bitcoin swing high to $57.4K on the 1-hour chart

Bitcoin registered a monthly low of $55,250 on Sept. 6, but on the positive side, it tested an untouched demand zone from August. Forming a lower low on the 1-hour chart could allow BTC to undergo an immediate swing high toward $57,500.

Moreover, there is also a bullish divergence between the price and the relative strength index (RSI), which was also observed on the 4-hour chart on Sept. 4.

Each swing low over on the hourly chart has witnessed an average of ~4% recovery in September on the 1-hour chart.

A 4% recovery is roughly around $57.5K-$58K right now.

At $57.5K, upside liquidation leverage positions are also present. After taking out downside liquidity over the past few hours, the price can move back within a lower high price range, where day traders could treat the liquidity pool as a potential short opportunity.

Short-term holders realized price is at $52K

A daily close below $55,000 will open the possibility for further downside for BTC price over the next few days. Losing the demand zone at $55,000 opens a potential retest for Bitcoin around $52,100.

Axel Adler Jr., a Bitcoin researcher, highlights that this is the “next closest target” since it is the current realized price of short-term holders.

Additionally, the range between $50,500 and $53,000 is marked by large whale accumulations from February 2024.

Liquidity sweep at $49K?

If BTC cannot hold $52,000, $49,000 should be the final support price, and its long-term bullish structure will face serious bearish pressure.

Similar to the last bull run in 2021, BTC will retest the 50-weekly EMA if it drops down to $49,000 in the coming weeks. Bitcoin hasn’t closed a weekly candle below the 50-weekly EMA since October 2023.

In 2021, Bitcoin maintained a weekly position above the 50-weekly EMA, and the indicator provided support before the second leg of the rally. The RSI also reset around the 50 level, and a similar reset is taking place now.

Related: Arthur Hayes sees sub-$50K BTC price as Bitcoin risks 'stark' trend shift

If the price action repeats, Bitcoin should avoid consolidation under $50,000 for a prolonged period, as it will lead to a weekly close under the key EMA level.

Ultimately, another sweep at the $49,000 H2 2024 bottom could occur before the bull cycle can continue.