All hands on deck, the Bitcoin (BTC) price is approaching a key level.

On Sunday, the cryptocurrency market began to trend lower, with bulls failing to step in to facilitate a strong weekly close. While Bitcoin has remained relatively steady, it is currently trading decisively under the key $8,000 support level, changing hands for $7,850 on most exchanges.

This move brings BTC to a mere two or three percentage points above $7,700. Here’s why this is important.

Bitcoin Now At Key Price Level

When Bitcoin precipitously fell off the $10,000 cliff when Bakkt launched on September 23rd, the bearish price action stopped at one level: $7,700.

This is for good reason. As industry investor and analyst Crypto Neko recently pointed out, $7,700 acts as local historical support — Bitcoin bottomed at that level during the run-up earlier this year.

$BTC Macro View This is why the macro view is so important – Local Support (LS) at 7700

– If we break I can easily see 6s as we fill the gap between supports

– What is concerning is the 6k region was not resistance going up, so can it truly be considered support? pic.twitter.com/ozGaIz06P5 — NekoZ (@CryptoNekoZ) October 7, 2019

That’s not all. Per previous reports from NewsBTC, the one-week SuperTrend indicator’s baseline — a level which BTC never closed under during 2017’s bull run — sits at $7,800.

And, there exists a confluence of integral support levels around the high-$7,000s. These include but aren’t limited to the 200-day moving average; the 365-day exponential moving average, a level that Bitcoin bounced straight off of during mid-2017; the 50-week exponential moving average, among other levels that many say are indicative of Bitcoin’s medium-term trends.

Considering the historical and technical importance of $7,700 — or at least the confluence of moving averages and trend lines currently sitting at this price point — a strong move lower from here could mark the start of an even greater, drawn-out correction, one that analysts have proposed may last until Q1 of 2020.

Related Reading: Institutions Long on Bitcoin as Analysts Expect Upward Price Breakout

At the very least, analysts have said that the loss of $7,700 could lead to a rapid drop to the low-$6,000s — where it is believed that Bitcoin’s next key historical support level lies.

Can Bulls Save Crypto?

This may leave you wondering — can bulls save the cryptocurrency market from falling off an even steeper cliff?

According to a number of analysts, maybe not. Brave New Coin’s Josh Olsezwicz recently noted that Bitcoin is only 20% from the one-day Kijun line of the Ichimoku Cloud, which is still far away from the historical reversal point of 35% to 60% off the Kijun.

1D $BTC price 20% off from the kijun here 35-60% off has been the historical reversal point 6.5k is 35% from kijun pic.twitter.com/cf1ThB4sZ9 — Josh Olszewicz (@CarpeNoctom) October 6, 2019

There are some promising signs, though.

According to a recent Commitments of Traders report shared by trader Romano, traders that identify as either “asset managers” or “institutions” are currently 69.31% long on the CME’s Bitcoin futures, and 30.69% short by the number of contracts open. With Romano claimed that institutions “have a good track record for the right directional trade”, it could be implied that this subset of BTC investors are expecting bulls in the cryptocurrency market to soon return.

Related Reading: Why a Bloomberg Opinion Writer Expects a Bitcoin Bull Run

So as always, financial markets are a game of odds. And right now, it seems that the odds are slightly favoring the bears.

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