Bitcoin Faces Critical Support Test as Technicals Suggest Deeper Decline, $51,348 in View

With a bearish weekend and a crash impending, will Bitcoin sustain above $57,000 this week?

With almost $140 million in long-liquidations in the crypto market, Bitcoin is under $58,000. This puts a bearish start to the week and month. As the declining trend leads to bearish patterns teasing a trend continuation, will the buyers hold the $57,000 level this week?

Bitcoin Timeframes Puts Crucial Levels at Risk

Creating a broader market crash, Bitcoin fell 2.81% on Sunday to test the $57,200 support level. Currently, the Bitcoin price is trading at $57,515 with an intraday growth of 0.36% and a higher price rejection. Thus, it reveals a gradual increase in supply. 

Increasing the chances of a downtrend, the Bitcoin price will likely drop under the $57,000 support level and test the decent bottom pound at the $54,000 mark.

The BTC price action reveals a bearish exchange in the daily and weekly charts while taking support from the 50-week EMA. Further, the 50-day and 200-day EMA warns of a death cross event. 

In the 4-hour chart, the Bitcoin price forms a falling wedge pattern and cracks under the $57,600 support level. With a 0.37% drop in the last four hours, the BTC price warns of a bearish outcome, breaking under the support trendline. 

Undermining the bullish divergence visible in the 4-hour RSI line, the breakdown rally could find support at the $54,552 support level or the $51,348. The 4-hour chart also reveals the 50-day and 200-day EMA in a bearish alignment post-death cross trend downwards. 

In case of a bullish reversal, the uptrend will find dynamic resistances at $59,661 and $60,722, respectively. The Bitcoin price action levels at $61,451 and $64,596 are secondary targets.

Will Investors Continue to Hold Bitcoin?

According to a recent update by Ali Martinez, trading activity has plummeted, with capital flows for major assets like Bitcoin falling below those of stablecoins. This significant decline suggests a cautious market, where investors are opting for the relative safety of stablecoins.

This shift in investor behavior often indicates market uncertainty, prompting investors to seek refuge in stablecoins as a defensive strategy. It may also be a sign that investors are positioning themselves for potential future buying opportunities, waiting for a more favorable market environment to re-enter the market.

However, despite the recent decline in market enthusiasm, a notable trend has emerged among long-term Bitcoin holders. According to data from Santiment, the number of Bitcoin addresses holding at least 100 BTC has increased by 283 wallets in just one month, reaching a 17-month high of 16,120 wallets.

This suggests that some investors remain committed to holding onto their Bitcoin, potentially indicating a strong conviction in the asset’s long-term value.