Bitcoin plummets to key support as analysts eye potential further downside

Bitcoin bulls were surprised to see the benchmark cryptocurrency plummet to below $10,000 yesterday, which this drop marking a bearish resolution to the tight trading range the crypto had previously been caught within in the lower-$10,000 region.

Today, this bearishness extended further as the crypto reeled down to lows of $9,700, with today's drop potentially opening the gates for significantly further losses.

In the near-term, analysts are noting that $9,700 is a critical support level that must be held above, with a sustained dip below this potentially sparking a violent drop down to $8,500.

Bitcoin plummets to key support following yesterday's weakness.

At the time of writing, Bitcoin is trading down nearly 1 percent at its current price of $9,850, which marks a notable decline from recent highs of $10,200 that were set early yesterday morning when the cryptocurrency was caught within a bout of sideways trading.

This morning, this recent bearishness extended further when the crypto plummeted to lows of $9,700, which is a key support level that bulls are in the process of defending.

Jonny Moe, a prominent analyst, spoke about the importance of this level, concisely noting that it is a "Magical level" for him.

Multiple factors suggest BTC will break below this key support.

Josh Olszewicz, a well-respected crypto analyst and trader, explained in a recent tweet that he believes Bitcoin will soon retrace down towards $8,500, which could be driven by high open interest and declining futures premiums.

If these factors do give bears enough strength to push Bitcoin below $9,700, this ongoing downtrend could turn into a full-fledged bout of capitulation.