Source: Cointelegraph Original: "{title}"
According to Julio Moreno, head of research at CryptoQuant, Bitcoin has dropped 26.62% from its historical high of $109,500, and this decline is heading towards the deepest retracement of this bull market cycle.
Bitcoin price drop analysis. Source: X
Bitcoin has experienced significant retracements in past cycles, such as an 83% drop from its peak in 2018 and a 73% pullback from its all-time high (ATH) in 2022. In comparison, the current 26.62% decline, while substantial, has not yet reached the severity of previous bear markets.
This indicates that although the current drop is impactful, its intensity has not reached the levels seen in past cycles. However, the crypto and macro research resource platform "ecoinometrics" points out that Bitcoin may struggle to rebound quickly. Analysts explain, "Historically, when the Nasdaq 100 index falls below its long-term year-on-year average return, Bitcoin's growth tends to slow down and is also more prone to severe pullbacks."
Correlation between Bitcoin and Nasdaq. Source: X / Ecoinometrics
As the Nasdaq 100 index is currently flat year-on-year, even if Bitcoin's pullback halts, its price rebound may face resistance.
The recent drop in Bitcoin's price has also put Michael Saylor's strategy on the back foot, as the company chose not to increase its Bitcoin holdings for its financial reserves between March 31 and April 6.
Additionally, data from Strategytracker shows that the company's cumulative investment in Bitcoin amounts to $35.65 billion, with a return of only 17% over the current five-year holding period.
Can Bitcoin hold above $70,000?
From the weekly chart, Bitcoin has tested the 50-week exponential moving average (EMA) (blue indicator) for the first time since September 2024. In past market cycles, a weekly close below the 50-week EMA has often signaled the beginning of a bear market.
Bitcoin weekly chart. Source: Cointelegraph/TradingView
The first key focus point below the current price remains at $74,000, which is the historical high set in early 2024. However, the daily demand zone between $65,000 and $69,000 may be a more significant liquidity area due to its technical significance. Among them, $69,000 is also the historical high set by Bitcoin in 2021.
Furthermore, by the end of the first quarter, Bitcoin's weekly relative strength index (RSI) fell to 43, the lowest level since January 2023. In August 2023 and September 2024, the RSI rebounded at similar levels, leading to a price recovery for Bitcoin. In 2022, when the RSI fell below 40, bears completely controlled the market.
Anonymous crypto trader Rekt Capital also made predictions based on the daily RSI indicator, stating, "In this cycle, the historical trend of the daily RSI suggests that the range from the current price to around $70,000 is likely to form the bottom of this pullback."
Related: Tracker shows Bitcoin hash rate has historically surpassed 1 Zetahash for the first time
This article does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct their own research before making decisions.
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