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Following the sharp declines in the cryptocurrency market in recent days, some analysts expect the selling pressure on Bitcoin to continue and the price to test the $80,000 level.
At this point, Compass Point advises against buying on Bitcoin (BTC) dips until the $98,000 level is regained.
According to Decrypt, US-based investment bank Compass Point advised caution regarding buying on dips until Bitcoin regains the $98,000 level, which it has identified as the average buying price for short-term investors.
Compass Point analysts define the $98,000 level not as a random number, but as the average cost of buying Bitcoin for short-term investors.
At this point, analysts noted that Bitcoin recently rose to a two-month high of $97,500 but failed to surpass that level, falling back below $90,000.
Analysts interpreted the failure of short-term investors to surpass the $98,000 threshold as “reinforcing concerns that the BTC price may be heading towards a prolonged decline.”
“Last week’s rally was Bitcoin’s strongest recovery since it fell below the cost floor for short-term investors on October 30.”
However, it should be remembered that one of the defining characteristics of Bitcoin bear markets is the sharp sell-off that follows promising recovery rallies.
Consequently, according to analysts, Bitcoin’s inability to overcome this resistance could mean a correction towards $80,000.
Analysts stated that if Bitcoin experiences a correction reaching $80,000, “it would be easier to buy during the dip,” but warned that the risks associated with leveraged trading remain.
*This is not investment advice.