Bitcoins long-term rally is “broken” and will remain so until the price climbs above $85,000, said Jean-David Péquignot, chief commercial officer of derivatives exchange Deribit.
The largest cryptocurrency has settled in the $60,000 to $70,000 range in the past week, about 45% below the all-time high it hit in October. It is on track to decline for a fourth straight week and fell below $85,000 in late January.
“Until the market recovers $85,000, the long-term chart remains broken and the path of least resistance is technically lower,” Péquignot said in an interview on the sidelines of the Consensus Hong Kong conference.
Rising above $85,000 would confirm that buyers have established control, having soaked up all the supply that destroyed the long-term outlook. The Bitcoin price was recently near $66,600, well below Péquignot’s make-or-break level, and deep in bear territory with room for more pain.
Speaking of pain, $60,000 is the next major support, a price that almost came into play earlier this month as bitcoin wilted along with software stocks. According to Péquignot, it is a large psychological level where large purchase walls or multiple purchase orders have historically been located.
“If $60,000 doesn’t hold on a closing basis, the 200-week MA is the next logical and possibly final stop for this correction,” he said.
The 200-week simple moving average (SMA) is widely considered the holy grail for bottom anglers, or traders who hunt for bargains in bear markets to time their bullish bets. Since 2015, several bitcoin bear markets have hit lows near this average, which is why traders are now following it closely. The average is currently around $58,000.
“Traders would look at the $58k-$60k range as the ultimate support,” Péquignot said.
