Critical Bitcoin Price Thresholds
Bitcoin (BTC) is nearing a pivotal technical threshold that has historically marked the shift from bull markets to severe bear cycles, as indicated by a seasoned trading analyst.
The current scenario arises after Bitcoin breached the $90,000 threshold amid a widespread cryptocurrency market downturn, partially fueled by diminishing interest in riskier assets. This situation has resulted in a significant withdrawal of institutional investors from Bitcoin.
According to an analysis by TradingShot, shared on TradingView on January 26, Bitcoin is currently trading just beneath the one-month Bollinger Bands Basis, hovering in the mid-$80,000 range, with the spot price around $87,000 as the monthly close approaches. The analysis highlights that time is crucial for a rebound, as historically, failing to reclaim this level has been associated with significant downside risks.
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Long-term Bear Cycle Indicators
For over a decade, the one-month Bollinger Bands Basis has functioned as a significant long-term market divider. In the past 12 years, each monthly close below this level has heralded the onset of Phase 2 of a bear cycle. Bitcoin has now endured three consecutive months of testing and trading below this basis, a pattern that has never shifted to bullish without a decisive month-end recovery.
Vital Bitcoin Price Levels to Monitor
A confirmed monthly close beneath the $85,000–$88,000 range could potentially lead to further weekly support testing, with the initial significant downside target at the one-week MA200 near $50,000. This level has been reached in every bear cycle, marking the bottoms of January 2015 and December 2018.
TradingShot also identified the one-week MA350, situated in the mid- to high-$40,000s, as a more comprehensive bear-cycle target. This moving average marked the November 2022 bottom and, in previous cycles, wasn’t tested until the bearish phase was completely exhausted.
A potential bottom around $50,000 coincides with the 0.382–0.5 Fibonacci retracement of the entire bull-market advance, a zone that has contained all prior cycle lows. The convergence of the weekly MA200, MA350, and Fibonacci support further solidifies this area as a likely macro floor if bearish conditions persist.
The analysis suggests that a new bull cycle has historically only been confirmed after Bitcoin reclaimed and maintained a position above the one-week MA200, as seen in March 2023. Until a similar reclaim happens, a monthly close below the one-month Bollinger Bands Basis would statistically indicate continued bear-market conditions rather than a temporary correction.
Detailed Bitcoin Price Analysis
At the time of reporting, Bitcoin was trading at $87,762, reflecting a drop of over 3% within the weekly timeframe. Year-to-date, Bitcoin has experienced a decline of less than 1%.
From a technical analysis standpoint, Bitcoin’s price remains below both key moving averages: the 50-day simple moving average at $90,192 and the 200-day simple moving average at $104,666. This classic bearish indicator suggests that both short- and long-term trends remain under downward pressure.
Furthermore, the 14-day Relative Strength Index is at 41.64, which is neutral but leaning towards weakness, indicating limited bullish momentum at present.
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