Bitcoin prices have taken a hit, dropping below the $80,000 mark. This represents a 27% decline from the all-time high of $109,000 reached in January.

Bitcoin prices have taken a hit in recent trading, dropping below the $80,000 mark. This represents a 27% decline from the all-time high of $109,000 reached in January.

Bitcoin price dropped below the $80,000 mark on Thursday. The world’s largest cryptocurrency has fallen 27% from a 2023 high of $109,000 (around R1,635,000) hit in January. It's also down 14.6% for the week.

At the time of writing, BTC was trading at $79,766. The cryptocurrency is now testing what analysts consider an important psychological barrier.

This price level could determine the market’s direction in the coming weeks.

The crypto is still in the "still cheap" zone of the Bitcoin Rainbow Chart, a popular tool for long-term price analysis. The model uses colored bands in a logarithmic growth chart to help visualize market cycles.

In the two previous market cycles, prices reached at least the "Seriously sell!" territory before major corrections began. The current cycle hasn't even touched the "Is this a bubble?" range.

This divergence from historical patterns suggests we may not be near a market top. Other technical indicators support this view as well.

The weekly Relative Strength Index (RSI) provides additional context for Bitcoin's current position.

During the 2017 peak, Bitcoin's RSI remained above 70 for multiple weeks as prices climbed.

In the 2021 cycle, the price and RSI formed a bearish divergence before Bitcoin fell nearly 50%. Recently, the RSI was above 70 for six weeks but has since dropped below the neutral 50 line.

This pattern more closely resembles the mid-cycle correction of summer 2021 than a major market top. If history repeats, a similar correction could take Bitcoin to approximately $54,000.

Bitcoin dominance charts tell another part of the story. During previous market cycle peaks, Bitcoin's share of the total cryptocurrency market was declining.

Currently, Bitcoin dominance is on an uptrend. It's reaching levels not seen since March 2021, which doesn't align with typical end-of-cycle behavior.

CME Gap

Market analyst Ibrahim has highlighted the CME gap phenomenon as a factor in Bitcoin's short-term price movement. A gap has formed between $82,110 and $86,000 on the Chicago Mercantile Exchange.

These gaps often get filled as prices return to levels where trading paused. Ibrahim notes that Bitcoin previously filled a $10,000 gap within 19 hours on February 28th.

Based on this pattern, Bitcoin could attempt to reach the $86,000-$90,000 range within the next day or two. However, this wouldn't necessarily indicate a full trend reversal.

Another analytical perspective comes from the Realized Price of 3-6 Month UTXOs. This metric tracks the average price paid by investors who acquired Bitcoin in the mid-term timeframe.

The data identified $83,000 as a key support level, which Bitcoin has now fallen below. This breach might shift market sentiment toward fear.

The breach of this support could lead to increased selling pressure. Mid-term holders might begin to exit their positions if they fear further price declines.

If selling accelerates, Bitcoin could enter a distribution phase. The next support zone to watch is between $78,000 and $80,000.

Despite recent price weakness, long-term investors can find some reassurance in the technical data. Current market indicators don't match patterns seen at previous cycle tops.

The combination of a "still cheap" reading on the Rainbow Chart, uptrending Bitcoin dominance, and RSI patterns suggests the current decline may be a correction rather than the end of the bull market.