Cryptocurrency experts are advising traders to remain vigilant and potentially reduce their long positions if Bitcoin (CRYPTO: BTC) trades below a critical support level amid conflicting signals in the broader economic landscape.
What Happened: According to the latest 10x Research report, the crucial level to watch is the 21-week moving average, currently sitting at $60,918.
This price point coincides with a minor support level of $60,600, which previously acted as resistance in August and September.
“While the buy-and-hold strategy has historically been effective for U.S. stock indices and Bitcoin, there’s no guarantee it will remain so,” caution analysts at 10x.
This comes in light of conflicting market data, where faster-moving trends sometimes paint a different picture from slower macroeconomic indicators.
Bitcoin’s recent inability to surpass $66,000, which aligns with a descending resistance line, has added to market caution.
“The liquidity cycle has yet to materialize fully,” according to 10x analysts, a sentiment echoed by the flat ISM Manufacturing Index, which stayed at 47.2 this month, contrary to expectations of a sharper decline.
Another critical point revolves around the ISM’s impact on Bitcoin cycles.
“The ISM continues to signal downside risk for Bitcoin. Years of experience and rigorous backtesting have shown the ISM’s significance across multiple economic indicators and assets,” the analysts state.
They highlight that until the ISM demonstrates a consistent upward trend, the market may struggle to attract liquidity inflows.
Despite these concerns, there remains optimism for a potential upside.
Analysts still believe that Bitcoin could see gains in Q4, provided it holds above the $60,918 mark.
“The $60,918 level is closely aligned with the $60,600 level, which has acted as resistance multiple times in August and September,” analysts note.
However, they urge traders to be prepared: “If Bitcoin drops below the 21-week moving average of $60,918, traders should implement a solid risk management framework.”
What’s Next: For investors looking to learn more about the evolving dynamics of digital assets, the upcoming Benzinga’s Future of Digital Assets event on Nov. 19 offers valuable insights into the crypto landscape.
