Bitcoin Price Breaks Below 50-MA For The First Time This Cycle, Why A Crash To $38,000 Could Be Coming

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According to crypto expert Tony Severino, the Bitcoin terms has breached beneath the 50-week Moving Average (MA) for the archetypal clip successful the existent cycle, triggering renewed fears of a deeper decline. With terms momentum weakening and semipermanent inclination indicators flashing bearish informing signals, the anticipation of a terms crash to $38,000 is becoming hard to ignore.

50-MA Breakdown To Trigger $38,000 Bitcoin Price Crash

The Bitcoin terms enactment took a decisive crook this week arsenic the marketplace slipped beneath the 50 MA for the archetypal clip successful this four-year cycle. Severino noted successful his method investigation shared connected X this Monday that the 50 MA has historically marked the opening of extended downturns. He stated that pursuing Bitcoin’s launch implicit 14 years ago, each clip it has closed beneath the 50 MA, a prolonged carnivore marketplace has followed.

Severino’s terms illustration highlights BTC’s terms performance from 2017 to date. In the past 3 Bitcoin carnivore markets, aft the terms fell beneath the 50-week MA, BTC continued to driblet an further 61%, 59%, and 67%. On average, the cryptocurrency has mislaid 62% from the interruption point.

Applying the 62% drawdown to this cycle’s 50 MA level, the expert predicts Bitcoin could soon acquisition a terms clang to $38,000. From the cryptocurrency’s existent terms of supra $87,000, this represents a staggering 60% decline. Additionally, it would connote a astir 70% diminution from its all-time precocious of much than $126,000.

Severino warns that traders calling for a price bottom whitethorn beryllium ignoring however acold Bitcoin has historically fallen erstwhile this semipermanent inclination fails. He indicated that the 50-week MA has repeatedly served arsenic a dividing enactment betwixt bullish and bearish phases, and that terms slipping beneath it has much often led to extended periods of weakness and capitulation.

Bitcoin Momentum Indicator Falls To Historic Lows

A 2nd analysis presented by Severino focuses connected Bitcoin’s regular LMACD, which is present adjacent levels not seen successful much than 1,250 days. The oscillator has lone pushed beneath this level six times since BTC’s 2017 macro peak. These past instances correspond to periods of dense downside momentum wherever the cryptocurrency had yet to implicit its bottoming process.

Looking astatine Severino’s terms chart, the extended play without revisiting this little bound suggests Bitcoin whitethorn beryllium overdue for a momentum reset. The LMACD indicator’s existent speechmaking is besides unusually anemic historically, signaling that marketplace momentum has not yet reached utmost pessimism.

The readings further bespeak that, though BTC remains successful a downtrend, terms corrections stay imaginable earlier a existent bottommost is established. According to CoinMarketCap data, Bitcoin is trading beneath $87,000 amid volatile, choppy conditions that person contributed to its 24% diminution implicit the past month.