Bitcoin (BTC) is undergoing a significant price correction, having lost over 7% of its market value within the past month. After reaching an all-time high, the leading cryptocurrency has struggled to regain its upward momentum, leading to speculation about a possible market peak.
Scott Melker, a well-known market analyst and host of The Wolf of All Streets Podcast, recently provided insights that align with these bearish sentiments. In a post on June 21, Melker highlighted that Bitcoin has closed below the 50-day moving average (50 MA) on its daily trading chart. This occurrence has not been seen since two months ago when Bitcoin was trading at approximately $84,000. The 50 MA is a widely used technical indicator that reflects an asset's average closing price over the past 50 days, helping traders gauge the current market trend.
Melker pointed out that when Bitcoin's price remains above the 50 MA, it typically indicates a bullish trend, whereas a drop below this level suggests bearish momentum and the potential for a trend reversal. He noted that Bitcoin last fell below the 50 MA as a support zone in early February, when it was trading around $100,000. This breach triggered significant selling pressure, leading to a prolonged market correction that saw Bitcoin dip to a low of $74,000 in April.
Given the current market uncertainty, the recent daily close below the 50 MA reinforces bearish sentiments, raising the possibility of another decline of about 26%. If this scenario unfolds, investors might anticipate a target price around $76,200. To counter these negative projections, Bitcoin needs to maintain its position above the $100,000 resistance level, which could potentially enable a retest of its all-time high and reinitiate price discovery.
As of now, Bitcoin is trading at $102,889, reflecting a 1.43% decrease over the past day. Additionally, the asset's daily trading volume has dropped by 29.30%, currently standing at $35.15 billion. With a market capitalization of $2.02 trillion, Bitcoin retains its status as the largest cryptocurrency and the fifth largest asset globally.
However, market analyst Ali Martinez warns that Bitcoin may be slipping into bearish territory, echoing Melker's concerns. According to insights derived from MVRV pricing bands, if the market loses its current support at $102,000, it could pave the way for a decline toward $82,000.
