The calculus of investing in Bitcoin (BTC) is simple: lower lows point to more lows, while higher lows signal a pending high, according to the analysis by crypto derivatives exchange Bitfinex.

The analysis began by noting that Bitcoin price action has been displaying a series of lower lows since December 2021, suggesting a bearish trend unfolding in the short term.

The analysis highlighted that Bitcoin is currently testing the lower Fibonacci level, which could serve as a point of contention between buyers and sellers.

"A break below this Fibonacci, especially on a decisive close, would signal a continuation of the bearish trend and open up potential targets lower, signaled by the next Fibonacci levels or the 1.272 Fib, if we're considering Fibonacci extensions," the exchange explained.

The exchange also noted that a break above the Fibonacci, particularly on a decisive candle, signals a structural shift into bullish territory.

"This scenario would indicate that buyers are gaining strength and could push for higher price action, signaled by a move to the 0.618 Fib, followed by the 0.5 Fib, if the 0.618 Fib is crossed and closed above," it added.

The analysis also touched upon the implications of the 200-week moving average, noting that it is currently serving as a strong support level for Bitcoin.

"A glance at the weekly chart reveals that the 200-week moving average is providing support at around $87,441, a level that could be crucial in the short term," it said.

Pointing out that the price has tested this support on several occasions, the analysis stated that sellers are attempting to break below it to continue the downtrend.

"However, buyers have managed to defend this support so far, suggesting a balance of strength between the two parties," it added.

The analysis concluded by stating that a break below the 200-week moving average could signal a weakness in demand, paving the way for a deeper correction.

"This scenario would likely see sellers aiming for the 127.2 Fib, followed by the 161.8 Fib, if the 127.2 Fib is crossed and closed below, considering further Fibonacci extensions," the exchange said.