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In the past 24 hours, the digital currency market has seen a new wave of selling, pushing the price of Bitcoin to fall rapidly to $74,000. The price then rebounded again and is trading above $77,000.
Despite the brief recovery, the currency is still down about 12% on the week as signs mount that the market could fall further and have a lower cycle bottom than previously estimated, according to analysts.
Deeper cycle lows:
Well-known analyst “Dr. Profit” has revised his forecast for the bottom of the Bitcoin cycle, lowering the target range to $54,000-44,000.
He attributes this to what he describes as key technological developments:
Below the 100-week moving average (MA100 Weekly), which he believes is an important dividing line between bull and bear market conditions.
In his view, Bitcoin’s breakout of this average level in October 2023 confirmed the start of the last bull market, while another decline roughly two years later (combined with the broader cycle rhythm) signals a transition to a bear market.
He also noted that the emergence of a death cross is another factor supporting a negative scenario, given that the current configuration is very similar to the structure ahead of the 2021-2022 recession.
He added that a break below the 100 weekly moving average (MA100 Weekly) is sharp and decisive and represents confirmation of the bearish flag pattern he has been repeating in his analysis in recent weeks.
Additional Stress Factor: Breaking Down Cost-Averaging Strategies
The analyst also noted that Bitcoin’s fall below the “Strategy” company’s average entry price, estimated to be around $76,000, poses an additional source of risk, considering that this could increase fear and panic in the market.
He noted that a large portion of Strategy’s purchases were done with leverage and that the stocks the company used as collateral were falling, making stabilization more difficult when Bitcoin trades below cost.
“Strategy’s” Bitcoin holdings were almost evenly divided in terms of profits and losses, he added, while stressing that there were no profits.
He also warned that an emotional wave of selling could be influenced by external narratives, including speculation related to the Epstein documents, which could trigger volatility regardless of the accuracy of the allegations.
Bitcoin may need a “new narrative”
On the other hand, a “Matrixport” update indicated declining demand from traditional financial investors via Bitcoin spot ETFs (spot ETFs), reinforcing the cautious outlook.
These funds have experienced three consecutive months of net outflows, according to the firm, although some wealth managers in the United States only recently offered these products to clients.
Matrixport also reported that the last month’s big inflows were in July, with a brief rebound in October but overall momentum declining since the summer.
This slowdown continues despite gold’s gains and continued talk of canceling the dollar.
As a result, the firm believes Bitcoin may need a new or updated narrative before a sustainable bottom forms and interest from traditional investors returns.
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