Bitcoin's Price Bottom May Not Fall Below $55,000

A recent analysis suggests that Bitcoin's price may not drop below $55,000 in this cycle. This conclusion stems from technical indicators and the patterns observed in previous market cycles.

Key Takeaways

A key cryptocurrency analyst claims that Bitcoin's lowest point this cycle is likely to be around $55,000.
Predictions of a plunge to $35,000 are considered overly pessimistic.
Historical trends show that Bitcoin prices have consistently held above certain technical indicators known as Bollinger Bands.
Another analyst believes that a correction to $55,000 is improbable, projecting a range closer to $65,000 to $68,000 instead.
A breakdown of crucial support levels near $72,000 to $75,000 could lead to significant consequences for Bitcoin prices.

Bollinger Bands suggest Bitcoin bottom can’t fall under $55K

Current Bitcoin Market Analysis

A crypto analyst has stated that the worst-case scenario for Bitcoin this cycle would see its price drop to $55,000, contrasting sharply with some forecasts predicting a fall to $35,000. Such a decline would represent a 72% retracement, which has happened in the past when Bitcoin dropped 77% from its high of $69,000 in November 2021 to a subsequent low of $15,500 in November 2022.

The analyst, known as “Sykodelic,” shared with his 62,000 followers on X that he considers the expectation of Bitcoin hitting $35,000 in 2026 as "absolute rubbish." He explained that for Bitcoin to retract by 75%, it must experience a full expansion, which hasn't occurred in this cycle. According to him, retraces of this magnitude are only feasible if there's a corresponding level of expansion as indicated by the relative strength index (RSI).

Currently, Bitcoin is down by 31% from its early October peak of $126,000, a common occurrence even during a bull market.

Importance of Bollinger Bands

The analyst highlighted that Bitcoin prices have never dropped below the Bollinger Bands on the monthly time frame. Comparing the current market cycle to 2017—when there were significant gains but no drops below monthly Bollinger Bands—they questioned the rationale of expecting a deeper contraction given the current cycle's weak expansion.

BTC is currently holding the monthly mid-Bollinger Band. Source: Sykodelic

Other Analysts' Perspectives

Jeff Ko, Chief Analyst at CoinEx, remarked that even a drop to $55,000 seems unlikely. He posited that the bear-case scenario would involve Bitcoin revisiting levels around $65,000 to $68,000. Ko noted that the traditional four-year market cycle appears to be evolving, and with increased institutional involvement, he doesn't foresee another 70%–80% drop from all-time highs.

Related: This indicator suggests we’re out of the Bitcoin bull market.

Potential Risks Ahead

Augustine Fan, Head of Insights at crypto trading software provider SignalPlus, suggested a bearish outlook if Bitcoin breaks below the critical support zone of $72,000 to $75,000. He warned that such a breakdown could trigger catastrophic selling with unpredictable consequences, considering the scale of stop-loss selling activity currently affecting the market.

As of this writing, Bitcoin was hovering around the $87,000 mark, showing signs of recovery after falling to $84,000 on Monday.

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