Bitcoin, the largest digital asset by market capitalization, could be on the cusp of another major drop.
With the flagship cryptocurrency recently extending its losses and marking its worst performance since November 2022, analysts and investors are closely monitoring key levels of support and resistance.
A recent observation from cryptocurrency analyst Ali, known as @ali_charts on the X social media platform, indicates that if Bitcoin loses its support at $25,400, it could see a further dip to as low as $22,650 or even $20,590.
On the flip side, Ali notes that the cryptocurrency would need to breach and hold above the resistance level at $28,830 in order to signal a bullish reversal.
A global rise in bond yields
These developments come against a backdrop of a global rise in bond yields, which traditionally deter dip buying in riskier assets such as cryptocurrencies, Bloomberg reports. Bitcoin, which recently traded close to a two-month low at approximately $26,000, reflects this broader sentiment.
As borrowing costs anticipate staying high for an extended period, it dampens demand for volatile investments across the board, from stocks to digital currencies.Further compounding Bitcoin's shaky position are global economic conditions. Longer-term U.S. Treasury yields are touching multi-year highs.
Such an economic landscape predicts limited liquidity, which could be detrimental for riskier assets such as the bellwether cryptocurrency.
A long-term look
However, despite the cautionary landscape, some industry voices project a bullish view for the cryptocurrency's long-term future. Josh Olszewicz, a notable figure in the crypto trading space, highlights that the two-year moving average multiple for Bitcoin remains within the DCA (Dollar Cost Averaging) value area. Impressively, the 5x multiplier of this moving average currently sits at a staggering $168,000.
If Bitcoin begins to ascend in the forthcoming months, this figure could increase, offering a silver lining to the crypto enthusiasts.