Bitcoin (BTC) Could Bottom at Around $6,000 Before Reversing the Trend
Bitcoin (BTC) might go to around twice the bottom of the 2018 bear market low, which would see BTC have a reversal at around $6,000.
The price of BTC broke the projected support levels that many experts predicted. BTC has been quite volatile in the last few weeks.
Following a bullish momentum at the beginning of the month, BTC declined by around 28% due to the collapse of the FTX.
The ripple effect of FTX’s fall is causing more damage every day, as new details regarding the scandal are emerging. Given that BTC is highly affected by both fundamental and technical factors, BTC could go even lower than $10,000. Many predict that area to be the turning point of this bear market.
However, that may not necessarily be true. A detailed analysis of Bitcoin by DecenTrader suggests that BTC could go to around double the price of the 2018 bear market. In 2018, BTC went as low as $3,200. Hence, according to DecenTrader, BTC might go as low as $6,500 in the “worst-case scenario.”
Some Good Indicators
On the positive side, in the previous bear markets, BTC dipped by around 85% of its all-time high. So far, BTC has dropped by around 77%, where $10,000 would be the 85% dip area. However, for BTC to not go below $10,000, investor sentiment must improve, which is quite difficult given the current state of the market.
Moreover, given that the FTX scandal made a lot of people transfer their funds in self-custody wallets, and given that BTC is the most trusted cryptocurrency, the number of wallets that own at least 1 BTC has noticeably increased. Additionally, the number of Bitcoin retail investors recently hit an all-time high, suggesting that people rely on BTC despite market turmoils.
Read more: Number of Retail Bitcoin Investors Hits ATH
Technical indicators of a weekly chart also suggest that Bitcoin is close to reaching the lowest point of this bear market, all else equal.
Last but not least, if the bear market were to last long as the likes of Elon Musk suggested, Bitcoin supporters may have their fears alleviated after the BTC halving of 2024.
Also read: Why Bitcoin May Not Reach a New All-Time High Until the Next Halving – Review
If history does indeed repeat itself, then BTC is currently at around the lowest area following the BTC halving of 2020. Here is a graph that shows the correlation between the price of BTC following a halving event:
Nonetheless, nothing is certain in the crypto market, especially given the recent events and the regulations that may follow. Therefore, we’ll have to wait and see what happens with BTC. Still, the crypto community remains positive that Bitcoin may come back stronger than ever.