Bitcoin investors may need to brace themselves for an even bigger drop in the cryptocurrency.

In the last week, bitcoin has fallen about 9 percent and returned to the mid-$7,000s. On Thursday, the cryptocurrency was trading at around $7,500, which according to Robert Sluymer, head of technical strategy at Fundstrat, is a key level that needs to be held.

"I think that bitcoin's at a very critical stage because if that uptrend's going to continue, it needs to dig in right here," he said Thursday on CNBC's "Futures Now."

Sluymer refers specifically to an intraday chart of bitcoin, which shows the cryptocurrency has returned to a key support level it hit in June and again in mid-July. Not only that, but Sluymer also points out that the relative strength index (RSI) of bitcoin indicates it is now "very oversold," which may prove to be a buying opportunity for the cryptocurrency, but investors need to be careful.

"I look here thinking this is where it's got to stick, this is where you can put the long trade on," he said. "But it has to be done with very tight stops because if bitcoin cannot dig in here, then that short-term trend defined by the 15-day moving average begins to roll over and I think it's vulnerable to a collapse into that $6,000 range."

This means that should bitcoin drop below the $7,400 level, Sluymer sees a possible plunge back to mid-July lows.

Just over a week ago, bitcoin initially rallied through $8,000 before the Securities and Exchange Commission's rejection of what would have been the first bitcoin ETF sent the cryptocurrency tumbling again.

Year to date, bitcoin has fallen about 42 percent.