Bitcoin Tests Key Support Zone as 75% Drawdown Remains in Play

Bitcoin has been testing an important technical support zone at around $59,000 to $60,000, according to Katie Stockton, founder of Fairlead Strategies. In a recent interview on CNBC, she noted that this range is a key area for the cryptocurrency, and if it holds, it could line up with a Fibonacci retracement level.

However, if Bitcoin loses this support zone, Stockton predicts that the next major support could be in the low $40,000s. She also mentioned that 75% to 80% drawdowns are still possible, citing volatility as a potential opportunity for traders using trend-following signals.

Stockton emphasized that she is not focused on Bitcoin's four-year cycle framework, arguing that there are not enough historical cycles to rely on them with confidence. Instead, she is watching for downside exhaustion and a convincing shift in momentum.

Despite the current market conditions, Stockton remains bullish on Bitcoin from a very long-term perspective. She noted that buying into weakness is often the right move once momentum begins to stabilize, but it can be psychologically difficult for investors to do so when prices are falling.