Bitcoin could be poised for a painful correction if it doesn’t reclaim the $40,000 level, according to Matt Maley of Miller Tabak + Co.
The analyst told Bloomberg that things could turn ugly in no time if buyers do not show up to save the day:
If, however, it sees much more downside follow-through, things are going to get scary pretty quickly.
Bitcoin started testing the top of its long-lasting range last week, peaking at $42,607.
Prior to that, the top cryptocurrency managed to score 10 days in the green, its longest bullish streak in eight years.
However, the recovery came to a halt after bulls failed to break out of the range. The top cryptocurrency has now retreated to $37,754, dropping more than 10 percent from the local peak.
After plunging to as low as $30,000 in May, Bitcoin rallied above $40,000 in mid-June, but its recovery ended up being short-lived. Instead of breaking out of the range, the top coin ended up tanking to $28,616, its local low.
Such price action clearly shows how quickly things can go south when bears gain the upper hand.
The largest coin remains under pressure after U.S. Securities and Exchange Commission Chair Gary Gensler said that he wanted to tighten cryptocurrency regulation.