Bitcoin The long-term rally is “broken” and will remain that way until the price climbs above $85,000, said Jean-David Péquignot, trading director at derivatives exchange Deribit.
The largest cryptocurrency stabilized in the $60,000 to $70,000 range last week, about 45% below the all-time high reached in October. It is on track to fall for a fourth consecutive week and fell below $85,000 in late January.
“Until the market recovers $85,000, the long-term chart remains broken and the path of least resistance technically remains lower,” Péquignot said in an interview at the Hong Kong Consensus Conference.
A rise above $85,000 would confirm that buyers have taken control, having absorbed all the supply that destroyed the long-term outlook. Bitcoin price was recently near $66,600, well below the decisive Pequignot level, and deep in bearish territory with room for even more pain.
Speaking of pain, $60,000 is the next big support, a price that almost came into play earlier this month as bitcoin wilted alongside software stocks. According to Péquignot, this is a major psychological level, where the great purchasing walls, or multiple purchase orders, historically resided.
“If $60,000 fails to hold at the close, the 200-week MA is the logical next step, and perhaps even the last, for this correction,” he said.
The 200-week simple moving average (SMA) is widely considered the holy grail for bottom fishers, or traders looking for bargains at the lows of bear markets to time their bullish bets. Since 2015, several Bitcoin bear markets have reached lows near this average, which is why traders are now following it closely. The average is currently around $58,000.
“Traders would view the $58,000 to $60,000 range as the ultimate support,” Péquignot said.
