Bitcoin Could Fall Another 22% Unless It Holds This Key Support Level, Says Fairlead’s Katie Stockton | Currency News | Financial and business news

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According to technical analyst Katie Stockton of Fairlead Strategies, Bitcoin’s 8% decline to below $40,000 on Thursday paves the way for further declines.

She does not yet view bitcoin’s fall below $40,000 as a breakdown, but said in an email to Insider that it took the cryptocurrency out of a three-week consolidation phase and represented a change. bearish in short-term momentum.

Stockton is now eyeing $37,361 as a key support level for bitcoin, around 3% below current levels. “This level defines the long-term uptrend and is far more important than any lower intermediate level. $40,000 was not a key level for us.”

Any bitcoin breakout requires a consecutive weekly close below support for confirmation, according to Stockton’s work, so it’s too early to tell if bitcoin’s recent selloff will hold or if a quick rebound will materialize. But continued weakness “would suggest the correction is the start of a long-term bearish reversal,” she said.

A confirmed breakdown below Stockton’s key bitcoin support level of around $37,361 would set the stage for the cryptocurrency to test secondary support at around $30,000, representing a potential downside of another 22% per compared to current levels.

With oversold conditions in place, a rebound seems more likely than a confirmed break below support, according to Stockton. “However, we expect a ‘hard’ test of support given the short-term oversold territory, meaning bitcoin will likely spend some time below support before recovering.”

Whatever happens to bitcoin is likely to ripple through the broader cryptocurrency market, as it has been the undisputed leader given the size of its market. Ether prices fell 10% below $3,000 on Thursday, while most altcoins fell even further.

“Many altcoins are supported at their summer 2021 lows, making it critical that bitcoin maintains support as it sets the tone for the cryptocurrency space,” Stockton concluded.

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