BTC tested the 200-day SMA line for the first time since October.
The focus now is on the trendline representing the surge from October lows.
Bitcoin's {{BTC}} decline gathered pace Thursday, sending prices under the 200-day simple moving average (SMA), a good indicator of long-term trends in both traditional and crypto markets.
The cryptocurrency fell below the 200-day SMA at $58,492 during European hours, putting lows under $57,300, a level last seen on May 2, according to charting platform TradingView.
Markets that consistently trade below the 200-day SMA are said to be in a downtrend, while those trading above the average are bullish. BTC rose past the 200-day SMA in October, when the average value was $28,000. The breakout – fueled by expectations for a spot bitcoin ETF in the U.S. – paved the way for a sharp rally to record highs above $70,000 by March.
That bull market can be identified by a rising trendline connecting October and January lows. BTC's latest break below the 200-day line has put the focus on the bull market trendline support at $57,590.
A close (midnight UTC) below that level could lead to further selling and downward price momentum, as traders often use trendline breakdowns as indicators to make trading decisions.
Per Alex Kuptsikevich, senior market analyst at FxPro, prices could slide further to $51,500 in the short-term.
"From the current position, a 12% drop to $51.5k (February consolidation area) is more likely than the same amount of growth to $65.8k (50-day MA)," Kuptsikevich said in an email, noting the decline below the 200-day SMA.
9:15 UTC: Adds comments from FxPro's analyst.