The price of Bitcoin (BTC) has taken a hit due to the recent cryptocurrency market crash that followed the SEC’s lawsuit against Binance. The largest cryptocurrency by market capitalization dropped over 5% yesterday and is now approaching the long-term support area at $25,000.

If Bitcoin manages to hold this support level, it may start bouncing back to a new one-year high. However, if it fails to maintain this level, the following weeks could see a more significant correction in the broad cryptocurrency market.

Bitcoin’s Long-Term Support

On the weekly chart, the Bitcoin price is currently at its lowest levels since mid-March 2023. Nevertheless, the price still sits above the long-term support area (green), which has repeatedly served as both support and resistance levels (blue arrows).

There is a chance that the $24,000 – $25,000 range will act as support, constituting an S/R flip.

Moreover, this area corresponds to the 0.382 Fib retracement level, which was measured for the entire upward move since the start of this year. Typically, standard market corrections often reach this area before resuming the movement in line with the market trend.

The Fibonacci retracement levels indicate that after a significant price move in one direction, the price retreats or partially returns to its previous level before continuing moving in the original direction.

Another argument for the possibility of a potential bounce was provided by renowned analyst @ITC_Crypto. He pointed out that the Bitcoin price has returned to the so-called bull market support band, which is formed by the 20W SMA (currently at $26,210) and the 21W EMA (at $25,850).

Historically, holding the levels set by it was an indication of a healthy uptrend. Still, when this band was lost, it became a difficult-to-surpass long-term resistance level.

BTC Price Prediction: Will the RSI Hold the Yearly Line?

The daily chart of the Bitcoin price gives mixed signals. First of all, the BTC price has dropped below the median of the descending parallel channel, which has been in place since mid-April.

Usually, such an event leads to a movement towards the lower edge of the channel, which is currently located at $24,400 and remains in confluence with the horizontal area of a long-term support.

The descending parallel channel is a corrective pattern that usually leads to a breakout. Nevertheless, for this to occur, Bitcoin must hold its support levels.

The Relative Strength Index (RSI) is currently below 50 and decreasing. By using the RSI as a momentum indicator, investors can determine whether the market is oversold or overbought. Based on this, they decide whether to sell or buy assets. If the RSI exceeds 50 and the trend is upward, the bulls have the advantage, and the opposite applies when the reading is below 50.

However, the RSI’s daily chart appears to be following the ascending support line (black), which goes back to June 2022. So far, touches of this line have marked market lows and led to a strong bounce in the Bitcoin price (blue arrows).

If this occurs again, the previously mentioned support levels are likely to trigger a bounce. However, suppose both the RSI line and horizontal support levels are breached. In that case, BTC may continue declining until it reaches the next significant area at $21,500.

For Bitrabo’s most recent cryptocurrency market analysis, click here.