The global cryptocurrency market cap today stands at $2.36 trillion, marking a 2.6% decline in the last 24 hours. Amidst these market fluctuations, Bitcoin’s (BTC) attempt at recovery has been met with mixed signals from technical indicators, raising investor concerns.
Trading expert Alan Santana recently projected on TradingView that Bitcoin is on the brink of experiencing a significant downturn, known as an SD-Wave or an SSD-Wave.
An SD-Wave, or Super-Down-Wave, typically results in a price decline of around 20-30%. Conversely, an SSD-Wave, or Surprise-Super-Down-Wave, involves a more severe drop, potentially exceeding 40% and reaching up to 50%.
Bitcoin price analysis chart. Source: Alan Santana /TradingView
The BTC/USD chart reveals a notable decline in trading volume over the past four months, signaling weakening buying momentum, which often precedes a significant downward move.
This decreased interest in buying at current levels suggests the potential for further declines. Consequently, this bearish sentiment and declining volume may lead to historical support levels failing, resulting in further price drops.
The downward trendline on the chart indicates a continuation of the bearish trend, with the price consistently struggling to break above this trendline. Until the price convincingly breaks this resistance, the bearish outlook remains.
Key levels and strategies for navigating the downturn
The BTC/TUSD chart provides additional context and key levels for investors to monitor.
Bitcoin price analysis chart. Source: Alan Santana /TradingView
The March 2024 support range of around $57,500 has historically provided strong support and could act as a temporary buffer against a significant decline. However, breaching this level would signal a deeper downturn.
Additionally, the projected level based on altcoin correlations is around $40,000. Given that altcoins often move in tandem with Bitcoin, their current levels suggest Bitcoin may follow suit.
A drop to this level would indicate a severe market downturn, potentially triggering further declines across the cryptocurrency market.
Furthermore, the January 2024 support level around $35,000 is a critical historical support that could come into play if the market experiences an SSD-Wave.
Breaching this level would suggest a prolonged downtrend. Many altcoins, which are highly correlated with Bitcoin, are already trading at levels seen in January 2024.
Historically, altcoins moving first can predict the market’s direction. Their significant declines suggest Bitcoin could follow the same downward trajectory. This correlation emphasizes the need for investors to be vigilant.
Bitcoin price analysis
As of press time, Bitcoin is trading at $59,780, reflecting a 4% decline on the daily chart and a 12% decline on the monthly chart. Despite attempts to mount a recovery, the market is showing mixed signals.
Bitcoin 7-day price chart. Source: Finbold
Current analysis indicates that investors should be prepared for a significant drop within the next few weeks. Key levels to watch include $57,500, $40,000, and $35,000.
Monitoring these levels and market dynamics will be crucial for navigating the potential downturn effectively. Investors should stay informed and adjust their strategies accordingly, keeping a close eye on the key support levels and market signals to mitigate potential losses.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
