Bitcoin Downtrend Persists; Support at $30K

BTC is 43% off its all-time high near $69K, and upside appears limited.

Feb 22, 2022 at 7:20 p.m. UTC
Updated Feb 22, 2022 at 9:40 p.m. UTC

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

Bitcoin (BTC) sellers were active over the weekend, which contributed to negative momentum. The cryptocurrency appears to be oversold on intraday charts, although a price bounce could be limited toward $40,000 resistance. Lower support is seen around $30,000, which could stabilize the sell-off.

BTC was trading at $37,700 at press time and is down 15% over the past week.

The downtrend since November 2021 remains intact, albeit within a long-term uptrend. That means price action has a tendency to rise exponentially following cycle lows. For now, indicators do not suggest BTC is at a cycle low.

Previous drawdowns suggest selling pressure could continue over the short-term.

Currently, BTC is 43% off its all-time high near $69,000 reached in November 2021, compared with a 50% drop during the first half of 2021, and a 70% decline during the March 2020 crash. The most extreme peak-to-trough decline was roughly 80% during the 2018 bear market.

In this cycle, buyers will need to maintain support around the $27,000-$30,000 support zone to maintain the broader trend.

The chart below shows previous sell-off extremes, created on Koyfin, a financial data provider.

Interactive chart showing bitcoin's price along with the percentage drawdown from the peak (lower chart). (Koyfin/CoinDesk)

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Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

CoinDesk - Unknown

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

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