Bitcoin (BTC) has been subjected to an unrelenting downtrend over the past few weeks, which has occurred in tandem with the selloffs seen by more traditional asset classes.
This has led the digital asset to erase the bulk of its 2020 gains, and potentially invalidate the bullish market structure resulting from this recent uptrend.
Analysts are now widely noting that Bitcoin is currently hovering just above a key high time frame support region, making it imperative for bulls to defend against further losses.
Importantly, one widely respected economic indicator is showing that Bitcoin is still on track to see a notable parabolic rally in the days and weeks ahead, which could lead the crypto to rally as high as $100,000.
Bitcoin sees intense selloff as analysts watch key high time frame support
At the time of writing, Bitcoin is trading down just under 7 percent at its current price of $7,780, which marks a notable decline from daily highs of just under $8,800 that were set prior to the crypto’s capitulatory selloff that kicked off in the latter part of yesterday.
BTC buyers have been able to defend the cryptocurrency’s key support at $7,700 so far, which appears to be the only near-term support region that is stopping it from seeing a significantly further downside.
Bitcoin Jack – a well-respected crypto analyst on Twitter – spoke about this in a recent tweet, explaining that after losing its key Point of Control (POC) at $7,950 the crypto is now hovering above a cluster of key support regions.
“Some thoughts here on BTC. We moved -27% since the top. We arrived at a cluster of daily, weekly and monthly support levels, after losing POC. The reactions, if they are bullish, are often strong and quick.”
Economic “S2F” model offers highly bullish outlook for BTC
It is important to keep in mind that despite the ongoing selloff, Bitcoin is still on track to see notable gains according to its “stock-to-flow” model that has been popularized by prominent Bitcoin analyst PlanB.
He explained in a recent tweet that BTC is still on course to follow the course this model sets forth, which could mean it will soon see an over 1000% rally to fresh all-time highs around $100,000, with this rally coming about alongside the crypto’s upcoming mining rewards halving.
“Bitcoin S2F chart adjusted for today’s ‘crash’ … nothing really happened, BTC still spot on S2F track.”
Unless BTC sees significantly further downside going into its upcoming halving event, it is a strong possibility that it still has further room to grow in the weeks and months ahead.
