- Bitcoin‘s current 26.62% decline from its $109,500 all-time high could become the deepest drawdown of this bull market cycle.
- Historical data suggests Bitcoin may face slower growth when the NASDAQ 100 falls below its long-term year-on-year average return.
- Technical indicators show the weekly Bitcoin Price testing the 50-week exponential moving average for the first time since September 2024.
Bitcoin’s price has fallen 26.62% from its recent all-time high of $109,500, marking what could become the deepest drawdown of the current bull market cycle, according to CryptoQuant’s head of research, Julio Moreno. This decline, while significant, remains less severe than previous bear markets, which saw drops of 83% in 2018 and 73% in 2022.
Despite the substantial pullback, this correction appears milder compared to previous cycles. However, crypto analysis resource ‘ecoinometrics’ indicated that Bitcoin might struggle to make an immediate recovery, stating, "Historically, when the NASDAQ 100 falls below its long-term year-on-year average return, Bitcoin tends to grow more slowly. It also faces a higher risk of entering a severe correction."
With the Nasdaq 100 currently flat year-on-year, Bitcoin’s recovery prospects appear challenging. The downturn has also affected Michael Saylor’s MicroStrategy, which paused Bitcoin purchases between March 31 and April 6. According to Strategytracker data, the corporation has spent $35.65 billion on Bitcoin holdings, currently showing only a 17% return over a five-year period.
Technical Analysis Shows Critical Support Levels
On the weekly chart, Bitcoin tested the 50-weekly exponential moving average for the first time since September 2024. Historically, a weekly close below this indicator has signaled the beginning of bear markets in previous cycles. The immediate support level sits at $74,000, which was the early 2024 all-time high, while a stronger demand zone exists between $65,000 and $69,000.
Bitcoin’s weekly relative strength index (RSI) reached its lowest value of 43 since January 2023 at the end of Q1. In previous instances during August 2023 and September 2024, the RSI recovered from similar values to trigger price recoveries. However, when the RSI dropped below 40 in 2022, bearish sentiment took control of the market.
Price Bottom Predictions
Crypto trader Rekt Capital suggested that based on historical daily RSI trends, "anything from current prices to ~$70,000 is likely to be the bottom on this correction." This analysis aligns with other technical indicators pointing to potential support levels.
The $69,000 mark holds particular significance as it represents the 2021 all-time high price. If Bitcoin continues its downward trend, this historical resistance-turned-support level could be crucial for determining whether the current correction will deepen or if a recovery might begin.
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