Analyst Shares Worst-Case Scenario For Bitcoin (BTC) As Price Shows Concerning Signs

2 hours ago

While Bitcoin (BTC) continues to suffer important enactment levels, an expert has shared 3 imaginable scenarios for the flagship crypto’s upcoming performance, raising the alarm astir imaginable aboriginal signs of a carnivore market.

Bitcoin Price Correction Continues

On Monday, Bitcoin reached a caller multi-month debased aft dropping beneath $93,000 for the archetypal clip since May. The cryptocurrency started the week dropping astir 5% from the $96,000 country and retesting the $91,000 level arsenic support.

Notably, BTC has seen a 16% correction from its November opening and has mislaid aggregate important levels implicit the past fewer weeks, including the $100,000 intelligence obstruction and the 21-Week Exponential Moving Average (EMA) arsenic support.

Most recently, the flagship cryptocurrency closed the week beneath the 50-week EMA, which has raised the alarm for respective marketplace observers.

Analyst Rekt Capital noted that losing this indicator is “not thing we typically privation to spot if bullish Market Structure is to stay intact,” adding that “bear markets thin to corroborate erstwhile terms loses the cardinal bullish levels that person supported upside momentum crossed the cycle.”

He explained that Bitcoin has formed clusters of little lows astatine the 50-Week EMA crossed the cycle, which person “helped prolong a broader bullish method uptrend.” However, BTC is presently forming different clump below this indicator, alternatively of approaching the imaginable macro little precocious processing supra the 50-Week EMA.

As a result, BTC’s caller show signals the archetypal measurement of a imaginable breakdown, the expert warned:

A afloat breakdown unfolds successful 3 parts: first, a Weekly Close beneath the cardinal level; second, a post-breakdown alleviation rally that turns that level into caller resistance; and third, downside continuation that completes the bearish confirmation.

Early Signs Of A Bearish Trend?

Rekt Capital stressed that the 50-week EMA volition beryllium important successful determining whether BTC’s bullish inclination and inclination for “benign downside deviations” inactive hold.

He emphasized that if the flagship crypto fails to reclaim this indicator arsenic enactment and it turns into a resistance, it could beryllium transitioning from its downside deviation inclination to the aboriginal stages of a confirmed bearish trend.

The expert elaborate that during the aboriginal carnivore markets, “a Weekly Close beneath the 50-Week EMA is followed by respective weeks of post-breakdown alleviation rallies into that moving average, but those attempts yet fail, and the EMA simply acts arsenic absorption until downside acceleration unfolds.”

Based connected this, helium shared 3 imaginable outlooks for BTC’s performance. The best-case script for Bitcoin would beryllium reclaiming this indicator and successfully ending this correction arsenic a downside deviation, arsenic it would suggest that BTC remains successful a bull market.

The second-best lawsuit scenario would beryllium that Bitcoin sees a multi-week hesitation play beneath the EMA arsenic it enters the carnivore market, which could see a little overextension supra this level earlier a clearer inclination solution to the downside.

Meanwhile, the worst-case script would spot the cryptocurrency’s terms incapable to retest the 50-Week EMA, adjacent arsenic resistance, and straight participate the downside acceleration phase.

Nonetheless, the expert noted that, historically, the 3rd script doesn’t look arsenic apt if we person already entered a carnivore market. Instead, helium concluded that the recurring “relief-rally scenario” into the 50-week EMA earlier downside continuation seems much likely.