The price of Bitcoin has plummeted to a five-month low of $52,369.
Consequently, this 12.8% drop in 24 hours has raised concerns among crypto analysts. Many warned that further downsides could be on the horizon.
Also, some experts suggest Bitcoin might revisit the $42,000 mark.
Bitcoin’s Current Situation
The leading crypto asset is trying to maintain its position above $51,000.
Notably, this level is crucial for preventing additional downward pressure.
If Bitcoin fails to hold this support, it could trigger more active selling.
For instance, Alex Kuptsikevich, a senior market analyst, believes Bitcoin might drop to $42,000.
He noted that round numbers often serve as key focal points for investors.
“At its lowest point, Bitcoin dipped below its 50-week moving average. Without strong buyer support right now, it goes even lower, and it would trigger an even more active sell-off as it did in late 2021 and early 2022. If it doesn’t hold either, it’s worth preparing for a failure toward $42K,” said Alex.
Furthermore, the price action at these levels could determine Bitcoin’s short-term momentum.
Despite the bearish outlook, Bitcoin still has a chance to recover.
However, it needs to decisively reclaim the $51,000 mark to avoid further losses.
Source: X Post
Likewise, an analyst known as the Moon suggested that if BTC loses its anchor at $51,000, a drop to $45,000 is possible.
Factors Behind the Current Decline
Furthermore, the analyst added that Bitcoin’s failure to break the $70,000 resistance triggered the recent sell-off.
Specifically, this unsuccessful attempt occurred about a week ago. Since then, pressure on the cryptocurrency has been mounting.
Interestingly, Bitcoin’s over 20% decline aligns with previous bull cycle retracements.
Source: Coinglass data
Consequently, this suggests that the current drop might be part of a normal market cycle.
Support Levels and Potential Liquidations for Bitcoin
Despite the gloomy outlook, Bitcoin has significant support at the $50,000 mark.
This level is particularly important due to potential liquidations.
If Bitcoin falls below $50,000, over $400 million worth of leveraged short positions could be liquidated.
Moreover, if the price drops below $49,400, short Bitcoin liquidations could exceed $520 million across all exchanges.
These potential liquidations add another layer of complexity to the current market situation.
Overall, while Bitcoin faces significant challenges, the cryptocurrency market remains unpredictable.
Investors should stay alert and monitor key support levels closely in the coming days.