Is Bitcoin headed for a deeper correction? Watch these levels if $30K breaks

34


Bitcoin (BTC) has seen a massive surge in the past two months, in particular, as institutions jumped into the new asset class. The latest is Blackrock,  announcing interest in trading in Bitcoin futures while Grayscale continues to scoop up BTC at an accelerating pace. 

Total amount of BTC held by Grayscale Bitcoin Trust. Source: CryptoQuant

However, after a massive surge, the asset’s price has to come down for some tests of support as investors take profit. This is the beautiful cyclical nature of supply and demand.

BTC/USD is currently in a corrective phase since Bitcoin’s rally became overextended above $40,000. The primary question is how far the correction will go from here or whether the $30,000 level will be strong enough to fend off the bears.

$30,000 must hold to stay bullish

BTC/USDT 1-day chart. Source: TradingView

The daily chart for Bitcoin shows a tremendous rally in recent months. However, some weaknesses are emerging since the recent high, after which the price corrected by roughly 30%.

One of these weaknesses is the continuing lower highs since the recent peak high at $42,000. These lower highs are confluent with weaker bounces from the support area.

In this case, the $30,000 area has held before. However, to the concern of the bulls, the bounces from this area are getting weaker.

If the $30,000 area doesn’t hold, a further correction toward $24,000 becomes likely, which would mean a retrace of 40% since the recent highs.