The last few times Nikolaos Panigirtzoglou witnessed such negative price action in Bitcoin, buyers returned in time to prevent deeper slumps. This time, the JPMorgan Chase & Co. strategist is worried.

If the largest cryptocurrency isn’t able to break back above US$60,000 soon, momentum signals will collapse, strategists led by Panigirtzoglou wrote in a note Tuesday. It’s likely traders including Commodity Trading Advisers (CTAs) and crypto funds were at least partly behind the buildup of long Bitcoin futures in recent weeks, as well as the unwind in past days, they said.

“Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” the strategists said. “Momentum signals will naturally decay from here for several months, given their still elevated level.”

In those three previous instances, the overall flow impulse was strong enough to allow Bitcoin to quickly break out above the key thresholds, yielding further buildups in position by momentum traders, JPMorgan noted.

“Whether we see a repeat of those previous episodes in the current conjuncture remains to be seen,” the strategists said. The likelihood it will happen again seems lower because momentum decay seems more advanced and thus more difficult to reverse, they added. Flows into Bitcoin funds also appear weak, they said.

Bitcoin rose as high as US$64,870 around the time of the Nasdaq listing of Coinbase Global Inc., but has retreated back to US$55,000. The cryptocurrency is still up about 90 per cent year-to-date.

The coin, down five of the last six sessions, is struggling to overtake its 50-day moving average around US$56,819. For many chartists, that’s a bearish indicator since it tends to determine price momentum trends. Should Bitcoin be unable to breach its short-term trend line, it could move lower and test the US$50,000 level, about a 10 per cent decline from where it’s currently trading. The next area of support would be its 100-day moving average around US$49,212. That would signify an 11 per cent retreat from Wednesday’s trading levels.

Smaller and alternative coins that had run up in recent days also suffered declines Wednesday, with Dogecoin -- the poster-child for crypto risk-taking -- declining roughly 20 per cent to trade around 31 cents. That’s down from a high of 42 cents the day prior, according to CoinMarketCap.com.

Bitcoin fell as much as 4.3 per cent Wednesday to US$54,341 before recouping some losses.

--With assistance from Vildana Hajric, Kenneth Sexton and Katie Greifeld.