The cryptocurrency market crash triggered by the SEC’s lawsuit against Binance caused a sharp drop in the Bitcoin (BTC) price. The largest cryptocurrency by market capitalization lost more than 5% yesterday and is approaching the long-term support area at $25,000.
If Bitcoin holds this support level, it could initiate a bounce to a new one-year high. However, if it is lost, the coming weeks could bring a deeper correction in the broad cryptocurrency market.
Bitcoin reaches long-term support
The weekly chart shows that the Bitcoin price is currently recording its lowest levels since mid-March 2023. However, it still sits above the long-term support area (green), which has repeatedly served as support and resistance (blue arrows).
There is a chance that an S/R flip will take place now as well, with the $24,000 – $25,000 range acting as support.
Moreover, this area corresponds with the 0.382 Fib retracement level measured for the entire upward move since the beginning of this year. Standard market corrections often reach this area, only to later resume the movement in line with the market trend.
The principle behind Fibonacci retracement levels suggests that after a significant price move in one direction, the price retreats or partially returns to the previous level. It then continues the movement in the original direction.
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Author: Ryan James
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