Bitcoin bulls sent reeling by ‘very damaging drop,’ says chart watcher

The technical picture for Bitcoin deteriorated significantly Thursday when the No. 1 digital currency shed more than 5% for a second consecutive day, plummeting through critical support levels on its way to a two-week low below $6,300.

A day earlier, technical guru Rob Sluymer of Fundstrat Global Advisors said in a research note that the next one to two weeks were critical for Bitcoin chartists, citing the $6,600 to $6,800 level as crucial support, adding that a break of these levels could see a retest of the August lows below $6,000.

Speaking to MarketWatch on Friday, Sluymer said “that was a very damaging drop,” after Bitcoin

BTCUSD, +0.06%

 tanked more than 15% in 24 hours, crashing through the noted support. “There is no strong technical setup for Bitcoin, we remain with lower lows and lower highs,” adding that outside of day-trading he doesn’t see any reason to be trading it from the long side.

“If you do [day trade], you have to have a tight stop,” he continued. A stop-loss order, or stop, is a standing order to sell a security if it hits a certain price.

BTC/USD courtesy of TradingView

Furthermore, Bitcoin fell below its 100-day moving average, a closely watched momentum indicator. That move could spell trouble—it last occurred on Aug. 2 when it slumped from $7,500 to below $6,000 in less than two weeks, a decline of more than 20%.

But don’t tell owners of virtual currencies this. In a recent SharesPost survey, more than half of those who already own Bitcoin and other cryptocurrencies said they plan on adding to their portfolio and 57% of accredited investors and two-thirds of retail investors expect the price of cryptocurrencies to move higher over the coming 12 months.

Read: Despite crypto carnage, investors plan to add to digital assets, survey finds

However, no matter which way you spin it, numbers don’t lie. Bitcoin has fallen more than 50% year-to-date, it’s down 8.8% this month and 17.3% since the beginning of August.

For Bitcoin bulls who are looking for a bright spot. At least you don’t own Ether

ETHUSD, -2.70%

“Given relative performance vs BTC continues to lead to the downside we view the break below $250 as a legitimate breakdown with the next support at $195-$200,” wrote Sluymer.

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