Is Bitcoin Headed For Another Crash? Here’s What The Data Says
18 Mai 2023 - 02:00AM
NEWSBTC
Bitcoin (BTC), the leading cryptocurrency by market capitalization,
has been trading in a sideways trend since its drop from the
$28,000 level. As of the time of writing, BTC is currently valued
at $26,800, having experienced significant declines across all time
frames. The question on everyone’s mind now is whether this
downturn will continue or if Bitcoin is headed for another
crash. Related Reading: Crypto Assets Flow From Ethereum To
BSC, Are Users Escaping High Gas Fees? Can Bitcoin Holders Expect
Another 40% Drop In The Coming Weeks Cryptocurrency enthusiasts and
traders closely monitor Bitcoin’s performance after its recent
price drop. According to Miles Deutscher, an experienced
cryptocurrency analyst, Bitcoin typically experiences a temporary
rally after a decline, followed by a new low 5-8 weeks later.
Deutscher’s analysis shows that in 2020, Bitcoin’s price dropped by
56% within 59 days after rallying initially. Similarly, in 2021,
Bitcoin’s price dropped by 24% within 47 days, and in 2022,
Bitcoin’s price dropped by 42% within 40 days. With this said, with
BTC trading at $26,800, if it experiences a 20% drop, its price
will likely fall to $21,440, while a 30% drop would bring it down
to $18,760. A 40% drop would result in a price of $16,080,
potentially taking Bitcoin back to the lowest point of the 2022
bear market. 2023 Is Set To Be The Best Year For BTC Yet? On the
other hand, according to cryptocurrency analyst Adrian Zdunczyk,
historical data suggests that pre-election years are the
best-performing years on record for Bitcoin, with a 98.8% chance of
a bull run in 2023. Even though the worst six months of the year
usually begin with May, Zdunczyk believes a bullish trend will
likely emerge in the coming months. Looking at the weekly chart,
Zdunczyk notes that Bitcoin is currently experiencing a complete
throwback to the 200-week trend, completing the mean reversion.
While a strong correlation (0.42) exists between Bitcoin and the
S&P 500, the critical support near $25,000 has been defended.
However, if this support level breaks, traders could see prices
fall into the lower $20,000 area. Furthermore, Zdunczyk believes
more downside is possible if Bitcoin stays below $30,000. However,
after a successful retest of the 200-day baseline, the support
level has been confirmed by multiple techniques. Meanwhile, there
has been a deterioration in the 50-day average volatility, and the
long-term trend has been temporarily exhausted. Related Reading: US
Prosecutes Russian Hacker For Orchestrating $200 Million
Crypto-Ransomware Attacks Zdunczyk’s analysis suggests a clear head
and shoulders pattern has been completed, with a technical breakout
target of $22,000. However, if the pattern fails to break, it could
trigger a cascade rally beyond $35,000. As seen in the chart
above, the local resistance is currently at $28,000, backed by the
BirbicatorPRO (BPRO) analysis. The bears maintain control until
there is a powerful close above this level. Bitcoin bulls must wait
for a decisive breakout above $30,000 to ensure a more reliable
upward trend. Featured image from iStock, chart from
TradingView.com
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