Bitcoin The long-term rally is “broken” and will remain so until the price exceeds $85,000, said Jean-David Péquignot, trading director at derivatives exchange Deribit.
The largest cryptocurrency has settled in the $60,000 to $70,000 range this past week, about 45% below the all-time high it reached in October. It is on track to decline for the fourth consecutive week and fell below $85,000 in late January.
“Until the market recovers $85,000, the long-term chart will remain broken and the path of least resistance will technically remain lower,” Péquignot said in an interview during the Consensus Hong Kong conference.
Breaking above $85,000 would confirm that the buyers have established control, having absorbed all the supply that ruined the long-term prospects. The price of bitcoin was recently near $66,600, well below the decisive Péquignot level, and deep in bearish territory with room for more pain.
Speaking of pain, $60,000 is the next big support, a price that almost came into play earlier this month when bitcoin weakened along with software stocks. According to Péquignot, it is an important psychological level, where large buy walls, or multiple buy orders, have historically resided.
“If $60,000 does not hold at the close, the 200-week moving average is the next logical and possibly final stop for this correction,” he said.
The 200-week simple moving average (SMA) is widely regarded as the holy grail for bottom fishers, or for traders looking for bargains at bear market lows to time their bullish bets. Since 2015, multiple bitcoin bear markets have reached lows near this average, which is why traders now follow it closely. The average is currently around $58,000.
“Traders would consider the $58,000 to $60,000 range as definitive support,” Péquignot said.
