Bitcoin Faces 15% Drop Risk as Key Support Level Wavers

Bitcoin (BTC) is at risk of a significant decline if a crucial support level fails to hold, according to a prominent crypto trader. The trader, known by the pseudonym DonAlt, shared his bearish outlook on the TechnicalRoundup YouTube channel, which has 66,500 subscribers. DonAlt's analysis is based on Bitcoin's daily time frame, suggesting that if the current support level between $98,000 and $101,000 fails, the cryptocurrency could experience a rapid drop of up to 15% from its current price, potentially falling to around $90,000.

DonAlt's analysis indicates that Bitcoin's recent rally to a new all-time high of approximately $111,800 is a "false breakout" because it has retested previous support levels. According to the trader, "good breakouts" typically do not retest previous support levels, which suggests a lack of momentum and urgency in the current market. This retesting is seen as a sign of weakness, potentially leading to a more significant correction.

Despite the bearish outlook on the daily time frame, DonAlt notes that Bitcoin appears more bullish on higher time frames, such as the weekly and monthly charts. The weekly time frame is described as bullish but less so than the monthly time frame, which shows a strong and clean breakout. This discrepancy suggests that while there may be short-term volatility, the long-term trend for Bitcoin remains positive.

At the time of writing, Bitcoin is trading at $105,713. The trader's warnings highlight the importance of monitoring key support levels and understanding the implications of retesting previous highs. Investors and traders should be cautious and prepared for potential volatility in the near term, while also considering the broader bullish trend on higher time frames.