Bitcoin Forms New Support Around $50,000 – U.Today

Bitcoin is seeing a sharp drop in its price as selling pressure continues to intensify amid the prolonged crypto market volatility, showing no sign of recovery in the near future.

Following the consistent price drop, a popular crypto analyst, Ali Martinez, has shared a bearish analysis which suggests Bitcoin could be heading toward an extremely low support zone.

Bitcoin eyes support at $50,000

The analyst shared a chart from an MVRV Pricing Bands model, which signals that Bitcoin might be headed toward forming its next support level around $50,000 if its on-chain movement continues to weaken.

Following its recent price moves, Bitcoin’s price decline below $72,650 is highly significant as it had marked a critical support level for Bitcoin in the past weeks.

Bitcoin losing support at such a critical level has continued to drive its price downward, causing it to drop by over 14% within just seven days.

While the MVRV model helps to determine whether Bitcoin is overvalued or undervalued based on its historical cost basis, it suggests that investors would need to accumulate and hold their assets above the level to hedge against further volatility.

Bitcoin enters vulnerable position 

While Bitcoin has continued to trade far below the $72,000 mark, the analyst believes that Bitcoin is set to enter a more vulnerable position if the asset does not reclaim this level soon.

Having lost support around $72,000, the chart has projected the next major demand zone for Bitcoin at around $54,300 and $51,000.

Furthermore, the chart shows that the lower support range marks a major accumulation zone where traders significantly bought Bitcoin in the past.

Simply put, Bitcoin traders have previously stepped in during periods of market weakness at the $51,000 to $54,300 range. As such, it is expected that the area around $50,000 could become Bitcoin’s next major support base should selling pressure intensify.