Bitcoin bulls have one price level to defend

Bitcoin’s BTC$83,023.80 rally has stalled, and a handful of analysts say one price level will decide whether the next move is up or down.

The world’s largest cryptocurrency hit a high above $87,400 on Sept. 21. It has pulled back since, testing the $82,000 to $83,000 zone. That area matters. It’s where bitcoin topped out in May before tumbling to about $57,000 in June.

Bitcoin is still trading close to that level. Most market watchers expect another leg higher soon, with some expecting a rally to $100,000.

But some analysts are keeping an eye on the bearish case, and it starts with a drop below $82,000.

In trading terms, $82,000 is support, a price floor where buying pressure is expected to overpower selling pressure. Old ceilings often turn into new floors. Bitcoin struggled to break above $82,000 in May and again in early September. Once it finally did, that level became the line buyers are expected to defend.

“The level to watch is $82k,” said Jeff Anderson, head of U.S. at crypto trading firm STS Digital. He pointed to the double top at that level, a chart pattern shaped like the letter M that forms when prices hit the same peak twice and fail both times.

“A breakdown will probably yield a slip back into the high 70s,” Anderson said.

He doesn’t see a drop as the end of the rally, though. U.S. inflation and shaky confidence in U.S. government debt are the kind of forces that tend to help bitcoin over time. “Any move like this would be well supported,” he said.

Anderson blames the recent weakness on the bond market rather than on bitcoin itself. U.S. Treasury note prices are falling and yields are climbing. When yields on safe government bonds rise, riskier assets like crypto can look less attractive.

“Current softness this week is a direct result of yield markets unravelling and volatility exploding in fixed income space,” Anderson said. “At the current pace it feels like treasuries will keep selling off until equities finally crack out!”

Lacie Zhang, a research analyst at Bitget Wallet, sees the $81,500 to $83,000 zone as the key area.