Bitcoin May Drop Below February Low, With $54,000 as Last Key Support

Bitcoin, the largest cryptocurrency, has come under intense pressure in recent days, prompting analysis that it could fall below the low it reached in February.

In a report published June 5, crypto analyst Axel Adler Jr. wrote that Bitcoin is retesting its February low near $62,000 and is now attempting to break below that level.

Bitcoin is now trading well below the short-term holder, or STH, realized price of about $76,000, leaving short-term investors with substantial unrealized losses, he wrote.

The key support levels below the current price are $54,000, the network's average cost basis, and $49,000, the average entry price for long-term holders, or LTHs. In past cycles, Bitcoin fell to those levels when the market entered a full downturn, Adler added.

Investor losses are also mounting. Net realized losses over the past seven days totaled about $7 billion, exceeding the figure recorded when Bitcoin hit its February low.

Adler wrote that the current correction is unfolding differently from the February decline. In February, major panic selling emerged before the market formed a bottom. Now, selling pressure is strengthening as Bitcoin approaches its low, and there is still no sign of a rapid rebound.

He added that the market is repeating a bottom-testing phase similar to February, but with even larger realized losses. As long as Bitcoin stays above $54,000, it is difficult to classify the market as being in full capitulation. If that level gives way, however, the market could face further downside pressure.