Bitcoin May Still Be Primed For A Further Drop From Range

(CTN News) – Bitcoin has been stuck in a tight range of around $30,000 lately, which has some market watchers wondering whether it is vulnerable to further drops.

Despite its rise for the third day, bitcoin has been stuck around $30,000 for several weeks now. Furthermore, its record-high correlation with the Nasdaq 100 – which illustrates its behavior as a risk asset – has tailed off as tech stocks rallied last week.

“This is the type of de-correlation that nobody wanted,” said Antoni Trenchev, co-founder and managing partner of crypto lender Nexo. “Bitcoin has yet to test its sub-$26,000 lows of May 12. In light of Bitcoin’s failure to mirror the Nasdaq’s gains in the past week, it’s only a matter of time before that happens.”

The price of bitcoin has suffered in recent months due to a pivot toward rate hikes by the Federal Reserve and other central banks amid stubbornly high inflation. Terra’s collapse has also hurt sentiment toward digital assets.

Compared to some of its peers, including Ether, which is ranked #2, Bitcoin is holding up relatively well, but some technical analysis is still raising concerns.

Bitcoin’s sideways churn over the last two weeks inside a so-called “pennant” ended last week with prices breaking lower. According to the pattern, bears will continue to dominate until the token reclaims $30,200, and any break below $28,000 will bring $25,000 back into focus. Any price below $25,400 could put the 2017 peak – just below $20,000 – into play.

Until a meaningful low is in place, Mark Newton, head of technical strategy at Fundstrat, writes in a note Thursday: “A final pullback to test the May 12 lows around $25,401 seems more likely.”

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