We started the day poorly in the cryptocurrency market. Bitcoin dipped to $53,485 on Binance. This situation led to much worse levels for altcoins. An analyst commented on this latest drop, highlighting a pattern that has formed. According to this, a support level for Bitcoin was noted, and a wave of increase could follow from this level. Let’s look at the analyst’s assessment.
$52,000 Level is Strong Support for Bitcoin
Analyst Stockmoney Lizards shared an update on the cryptocurrency market on X today. The analyst specifically discussed the Bat-based harmonic model. According to the analysis, Bitcoin surpassed the first two support layers at $60,000 and $56,000. This indicates a bearish trend and shows that the cryptocurrency is facing significant downward pressure.
The analyst expects another liquidity flow that could result in a long wick falling below $50,000. This movement is said to form support at $52,000. The term “liquidity flow” typically highlights a sudden price drop leading to a sharp recovery. In this context, the analyst suggests that Bitcoin’s price could momentarily fall below $50,000 before bouncing back to stabilize around $52,000.
Bitcoin Could Drop to Lower Levels
Despite showing that Bitcoin’s daily Relative Strength Index (RSI) and other technical indicators are already oversold, Stockmoney Lizards believes there is still room for further downward movement. An oversold condition typically indicates that an asset is undervalued and may be due for a price increase. However, the analyst warns that Bitcoin may not be ready for a recovery yet.
According to Stockmoney Lizards, the ideal scenario involves Bitcoin consolidating at the $52,000 level. Consolidation, a period where the price moves within a narrow range and indicates a pause in the market trend, should form a bullish divergence characterized by higher trading volumes at this stage.
The question remains when this bullish divergence will occur. A bullish divergence happens when an asset’s price makes lower lows, but a momentum indicator like the RSI makes higher lows, signaling a potential reversal. The analyst indicates that this situation is not far off. Let’s see if the bullish divergence pointed out by the analyst will occur for BTC.
