Bitcoin took another leg lower Monday after China ramped up its crackdown on crypto mining. Bitcoin mines in Sichuan shut down over the weekend with authorities worried about the environmental impact of cryptocurrency.
Bitcoin tumbled 8%, trading at roughly $32,490. At the day's worst, it fell to a two-week low, under $32,000.
Ari Wald, head of technical analysis at Oppenheimer, says its downswing has caused damage to the charts. He pinpoints a drop below its 200-day moving average as particularly damaging to the technical setup.
"We've seen this before," Wald told CNBC's "Trading Nation" on Monday. "The similarities we see specifically for bitcoin are how it traded in 2018 and 2019, where it was really range-bound for a number of months in both those periods. A final leg lower, a final washout, was needed."
Wald says Monday's sell-off was not that washout — he predicts it will likely come later this year.
"We think that might not be for another four or six months down the line," he said. "As it stands now, we just think it's going to be a trading range environment with support at $31,000 and resistance at $41,000 given how bitcoin has been trading in recent months."
John Petrides, portfolio manager at Tocqueville Asset Management, is a bigger believer in the infrastructure around cryptocurrency.
"There's two issues with crypto: One is the currency and the other is the blockchain, and you have to distinguish the two. I think the currency is really hard, if not impossible, to value," Petrides said during the same segment.
Blockchain is the online ledger that records transactions. It is both decentralized and unable to be altered.
"The blockchain I think has value to it because we've seen the emergence of non-fungible tokens, NFTs, and the more NFTs that come to the market, the more they move to the blockchain. Ethereum is the largest open-source blockchain, so I do think that there's value to be had in ethereum, rather than bitcoin itself," he said.