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The leading cryptocurrency, Bitcoin ($BTC), fell sharply over the weekend, dropping to as low as $74,500. However, it recovered and continued its upward trend, reaching $78,400.
While Bitcoin is recovering after a sharp drop, further declines are expected in the market.
At this point, one bank stated that the bottom for $BTC will likely be around $60,000.
US-based investment bank Compass Point argued that the cryptocurrency market is in a bear market, has entered its final stages, and that Bitcoin will likely bottom out around $60,000.
According to CoinDesk, analysts Ed Engel and Michael Donovan stated in a report published on Monday that Bitcoin will also fall and bottom out between $60,000 and $68,000 unless a broader bear market occurs in US stocks.
“Although short-term risk remains on the downside, we believe we are approaching the final stages of the cryptocurrency bear market. Further declines would likely require a bear market in the US stock market.”
Bank analysts said that $BTC’s next support level is expected to be between $60,000 and $68,000, as long-term investors (those holding for more than six months) have made large purchases in this region in past cycles.
Analysts, who also pointed to the $81,000 to $83,000 region as a resistance level, warned about the $70,000 to $80,000 range.
According to analysts, an air gap is currently forming between $70,000 and $80,000, and structural support above $70,000 remains quite limited.
At this point, analysts also said that less than 1% of long-term investors were buying in this region, and prices could fall sharply from here.
Analysts also added that if $BTC falls below the $60,000-$68,000 support level, the next support could be around $55,000.
However, Compass Point noted that such a scenario would likely require a combination of negative events, such as a crash in US stock markets and a series of bankruptcies among major crypto companies.
*This is not investment advice.