Has Bitcoin bottomed out?Analysts say there is still a long way to go

Bitcoin has had a one-month roller coaster ride in January. The digital assets that were hugely successful in 2021 have now entered 2022 with blood and veins. Since then, it has managed to drop more than 50% from its all-time high of $69,000. With nerves jittery, investors scrambled to figure out when the shock would stop. As Bitcoin has yet to see any major support below $40,000, analysts say the worst may yet to come.

Bitcoin has lost a key support level

The pseudonymous analyst Dave the Wave is known in the cryptocurrency space for being one of the few to call the May crash. Dave was one of those who sounded the alarm for an impending price crash last year when the prices of digital assets like Bitcoin went into a frenzy. Soon after, the market did experience a price crash, leading to a downward correction of about 50%.

Related reading | Bitcoin breaks above $37,000, why it could drop to $29,000

This time, analysts issued another warning.Using multiple charts, Dave the Wave lists their analyze Bitcoin market. Prognosis? A further downward correction to $25,000 is likely.

BTC begins recovery trend | Source: BTCUSD on TradingView.com

The analysis is spread over multiple tweets, with Dave the Wave advertising their market expectations to their 90K Twitter followers. First, they use Fibonacci extensions for their analysis. It fell $25,000 after measuring its potential head and shoulders.

They point out that Bitcoin has broken a key support level. There is not much support below this, which means that the price of digital assets is prone to continue to fall. “The problem is once you lose that 40K area, there’s not much support down there,” the analyst said.

Chart Shows Bitcoin Losing Support Levels

BTC loses support at $40K | Source: Twitter

What’s in the store?

Naturally, the next step is to identify possible rebound points for the digital asset. They do this by plotting where the trend reverses. “Price has to break above resistance and resistance again before a trend reversal can be considered.” Bitcoin’s price has fallen below this point since the call, now hitting a low of $33,000.

Trend Reversal Chart

BTC misses trend reversal | Source: Twitter

Related reading | Markets may be suffering, but Bitcoin and Ethereum will pull back stronger, Bloomberg analyst says

Currently, the last chart in the series shows a possible upward reversal if the digital asset can hold above $35,000.

BTC fails to hold above $35,000

BTC fails to hold above $35K | Source: Twitter

Since this tweet went live, Bitcoin has not been doing well in the market and has actually fallen below this point. If Dave the Wave’s analysis is anything to go by, investors may need to brace for a shock as the next stop could be the $25,000 range, the next major support point.

Featured image from LinkedIn, charts from Twitter and TradingView.com

Source link

Leave a Reply

Your email address will not be published.