Bitcoin, the world's largest cryptocurrency by market capitalization, continues its volatile run as it again falls below its $10,000 price first reached at the end of 2017. Despite its more than 50% loss since highs reached in mid December, the digital coin is still up about 650% over the most recent 12 months. Yet as bitcoin breaks below support near $9,210, one team of bears expects another sell-off to plague crypto investors. (See also: Bitcoin Is the New Gold: Goldman Sachs.)

In a note to clients Sunday, Goldman Sachs' technical analysis team led by Sheba Jafari warned investors that bitcoin is in jeopardy of returning to its Feb. 6 low of $5,922. The analysts noted that investors should pay close attention to the mid-to-low-$7,000 range, suggesting that a breakdown of that level increases the probability of the digital currency falling below February lows. 

"The break is significant as implies potential for a more impulsive decline," said Jafari. "The next meaningful level is down at $7,687 to $7,198; includes the 200-dma and a 1.618 target off the high," she added, speaking to the bitcoin daily moving average (DMA).  

A Warning From the Feds

"The 200-dma in particular is important given that it held very well at the previous low in September," wrote the technical analysts. "Getting a close break this time around would warn of structural damage, increasing the risk of new local lows (<5,922). At this point, need to get back through 9,322 (the Feb. 26th low) for this to stabilize."

While bitcoin managed to recover much of its value lost in the beginning of the year, surging nearly 100% to $12,000 after its bottom, the digital coin has again seen its value drop off as it struggles with fears over heightened government regulation and a series of crypto hacks. Last week, the U.S. Securities and Exchange Commission issued a bold statement on the "potentially unlawful online platforms for trading digital assets," indicating that traders should only buy and sell them on exchanges registered with the federal agency. (See also: Ultra-Rich Investing More in Cryptocurrencies.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrency.

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