Bitcoin could fall to $ 13,000 as it falls below the historical trendline

Bitcoin price broke below a longstanding wave of support and helped maintain its strong upward trend after the crypto market crash in March 2020.

Known as the 50-Week Simple Moving Average (SMA-50), it represents the average price traders have paid for Bitcoin over the past 50 weeks. Over the years and into 2020, the loss of the 50-week SMA in support has helped propel the Bitcoin market into a tough bear cycle.

Bitcoin Price Crash Below 50 Week SMA In History | Source: TradingView

When the 50-week SMA acted as a support during the 2018 bear market, it helped prevent Bitcoin from experiencing deeper downtrends – from February 2018 to May 2018 – when the price of Bitcoin was corrected from its then record high of $ 20,000 .

Similarly, the SMA-50 supported Bitcoin incredibly during its correction from the high of $ 15,000 in 2019. In addition, it held its ground until March 2020 when the Covid-19 pandemic caused a crash in the world market.

Fractal Targets $ 12,000- $ 13,000

Charting expert Bitcoin Master shared its concerns about the possibility that Bitcoin could experience a price drop of up to 80% if it breaks below the 50-week SMA. He noted that Bitcoin could drop to $ 13,000 if the above fractal occurs.

“Bitcoin has just hit the 50-week SMA, let’s see if it breaks the tradition of at least 50% gains ($ 47,000) before there is a standard 80% ($ 13,000) drop on ATH.”

#bitcoin fall after the weekly candle opened under the structure I’ve been observing for a couple of weeks now.

I expect a significant increase between $ 24,000 and $ 29,000 because of the CME gap at $ 24,615.

After that, I’d enter a bear market low of $ 12,000 or take $ 2,000 on either side. pic.twitter.com/aMi2M45bmf

– Keith Wareing (@offiziellkeith) July 19, 2021

“Bitcoin fell after the weekly candle opened below the structure I’ve been following for several weeks.

I think the decline towards the $ 24,000-29,000 region is mainly due to the CME gap at $ 24,615.

Then my prediction for a bear market bottom would be $ 12,000 for, or in the range of $ 10,000 to $ 14,000. “

Meanwhile, Mike McGlone, Senior Commodities Strategist, Bloomberg Intelligence Intelligence mention on the 50-week SMA in a tweet at the beginning of July, with the possibility of stopping selling pressure being repeated. He advised investors not to sell their Bitcoin holdings immediately if the new price drops below this level.

“Selling Bitcoin with an initial decline below its 50-week SMA in the past has proven to be a loss even in a bear market.”

What do experts say?

The recent decline in Bitcoin price comes after a decline in the global risk market fueled by concerns that the highly contagious Delta variant of Covid-19 will slow an ultimate cure due to the virus.

Vijay Ayyar, director of business development at the Luno exchange, noted that Bitcoin could fall even further. In an interview with Bloomberg, he said the price of Bitcoin could fall as low as $ 20,000. However, he predicts it will retest $ 40,000 before falling into the next crash.

“Bitcoin first has to create another base before it starts up again. BTC will be between $ 20,000 and $ 40,000 for the remainder of the year. “

Jehan Chu, founder of crypto-focused venture capital and trading firm Kenetic Capital, has set a safe declining target near $ 25,000 but warns of a deepening sell-off if the bulls fail to support recovery from these levels.

“The first quarter cryptocurrency market momentum has stalled and threatens a deep bearish reversal, possibly below $ 25,000.”

However, another analyst was more optimistic about Bitcoin’s current position.

James Wo, CEO of global crypto investment firm Digital Finance Group, highlighted on-chain metrics, including the continued decline in currency inflows and active wallet addresses, as reasons to continue Bitcoin’s uptrend.

“Given these on-chain indicators, we can say that the majority of investors are waiting for important signals to get back into the market.”

Bitcoin on all exchanges | Source: Glassnode

Data from CryptoQuant, a South Korea-based blockchain analytics firm, also shows a bullish setup for Bitcoin, citing the market-to-real-value ratio (MVRV) of the cryptocurrency.

Specifically, the MVRV ratio represents the market capitalization of an asset divided by its net capitalization. If this number is too high, traders can interpret the Bitcoin price as overvalued and thus imply selling pressure. On the other hand, if the MVRV value is too low, traders may consider the Bitcoin price to be undervalued, which indicates buying pressure.

Bitcoin’s MVRV hits its lowest level in September 2020 | Source: CryptoQuant

One of the CryptoQuant analysts Note:

“Buy bitcoin at the same level in the previous cycle from January to March 2017. It is not selling below, but is preparing to pile up below. Short-term data offer a chance to test the support, a good chance of exposure. “

You can see the details of the bitcoin price.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to Cointelegraph

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