In the last 24 hours, the cryptocurrency market has seen Bitcoin solidify its position in the digital financial landscape. Despite a broader cryptocurrency downturn, Bitcoin showcased its well-known volatility by experiencing a significant drop towards the $40,000 mark.
related: Bitcoin Bulls Break Chains, Aim for $42,500: Will the Rally Soar or Stumble?
Experiencing an 8% decline to $41,900, Bitcoin later partially recovered its losses, initiating Monday’s trading session 5% down at $42,090. As per CoinGecko’s price updates, Bitcoin exhibited subtle variations during this period, suggesting an equilibrium phase following recent price surges.
These minor fluctuations not only mark a pause but also provide an opportunity for market participants to assess the current situation. Notably, cryptocurrency trader Josh Olszewicz, known as CarpeNoctom on X, conducted an empirical study pointing to a considerable risk of Bitcoin collapsing, potentially dipping below the $38,000 threshold.
Olszewicz’s analysis, focused on the daily Kijun line—a critical technical signal in cryptocurrency trading—paints a pessimistic picture. The Kijun Line, a significant medium-term trend indicator in cryptocurrency trading, is part of the Ichimoku Cloud indicator. This line, derived by averaging the highest high and lowest low over 26 periods, aids in identifying support and resistance levels and the overall trend direction.
The chart shared by VanEck, a prominent asset management company, underscores the importance of caution, emphasizing that Bitcoin’s historical performance doesn’t guarantee future results.
VanEck is exploring the potential impact of incorporating Bitcoin into traditional portfolios, challenging the conventional 60/40 investment approach.
Cryptocurrency trader and analyst Justin Bennett warned that Bitcoin might reverse its upward trajectory after another surge. Bennett’s chart indicates that Bitcoin is presently trading within a substantial ascending channel on the daily chart, with horizontal resistance around $48,000.
According to his analysis, Bitcoin could drop below $38,000 after reaching this upside target.
| Metric/Indicator | Value/Range |
|---|---|
| Bitcoin Price (initial drop) | $41,900 |
| Lowest Bitcoin Price (within 24 hrs) | $40,000 |
| Bitcoin Opening Price (next day) | $42,090 |
| Bitcoin Price Decline (at opening) | 5% |
| Bitcoin Decline (peak to opening) | 8% |
| Potential Bitcoin Collapse Target | Below $38,000 |
| Kijun Line (Daily) | Indicates possible bear case |
| Ichimoku Cloud Indicator | Medium-term trend indicator |
| VanEck’s Bitcoin Caution | Historical performance ≠ future outcomes |
| Bitcoin’s Resistance (according to Bennett) | Around $48,000 |