Cryptocurrency analyst and trader Justin Bennett is warning that Bitcoin (BTC) faces the risk of correcting by double-digit percentage points if a key support level crumbles.
In a new strategy session, Bennett tells 63,300 subscribers of the Daily Price Action YouTube channel that Bitcoin is showing signs of a potential bearish reversal.
According to Bennett, the support “level to watch” for Bitcoin is $106,000.
On how low Bitcoin could go if the $106,000 support level breaks, Bennett says,
“As far as targets go, if we do get that confirmed breakdown… …we do have this pocket back here that looks appealing. Now we have these lows around $101,000. That could be a first target…
…if we do get that reversal, my guess is we probably see the market come down here toward $100,000 and just below that to tag this area and fill that imbalance…
…so if the market gets below $106,000, you’ve got to look at this in a sequential order, meaning that you’re looking at these lows first. First target down here, second target down there, around $97,000 or so. And then potentially a third target down there around $92,000. So that’s how I’m looking at this here, if we do get that sustained break below $106,000.”
According to Bennett, Bitcoin’s outlook could turn bullish if it approaches the all-time high levels.
“If we see the market rally from here [around $106,500], take out this level [above $109,000], start to close up here and press on this level, then that would invalidate any idea of a breakdown. If the market reclaims $110,000 on the daily chart, then that would invalidate that move lower…”
Bitcoin is trading at $107,560 at time of writing, around 4% below the all-time high of slightly under $112,000.
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