The next bull market in Bitcoin is now building a bottom. As a result, bears continue to rule the market, sending the price of bitcoin below $29,000 in the last 24 hours. Traders expecting the bear market to conclude may have to wait longer due to unfavorable conditions.
Will Bitcoin Retrace?
Bitcoin is no stranger to retracements of higher than 20%. More substantial corrections have occurred in Bitcoin’s history than this current one.
Those who have been around long enough to recall previous meltdowns of more than 50% in less than a month can attest that this is just another hiccup. Since Bitcoin’s inception, there have been around seven price corrections, with the price dropping by half. Bitcoin has always bounced back after each of these corrections.
Bitcoin fell by 83% in a short period of time in April 2013. When China first outlawed Bitcoin in December of that year, it dropped another 50%.
BTC/USD slides below $30k. Source: TradingView
2018 was a difficult year. Although it reached an all-time high of about $20,000 in December 2017, it was only worth about $3,000 in December 2018.
More recent investors will recall the March 2020 meltdown, when Bitcoin dropped 50% in a few of days. In May of 2021, the same event happened.
Related reading | New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate
Despite this, markets are in chaos today, with Bitcoin down more than 20% in the previous week and more than 50% from its all-time high in November 2021.
The 200 week moving average(WMA) is probably the most dependable and straightforward chart to provide some information on Bitcoin’s present position . It usually rebounds back rapidly from the 200 WMA. Only twice in history has Bitcoin fallen below the 200 WMA, and both times it was only for a short time. For more than a month, it has never been below the 200 WMA.
Bitcoin’s 200 WMA is now about $22,000. With a current price of roughly $29,000, it may probably go lower or even trade sideways for a while, but the worst is likely behind it.
Bloomberg Analyst Believes BTC Will Plummet
Despite a recent 15% rally from the lows reached last week, Bloomberg analysts believe the flagship cryptocurrency will continue to fall. BTC now appears to be more fragile than previously.
According to the article, Bitcoin’s recent rally has resulted in the formation of a “saucer-top” pattern on an hourly BTC chart. A Head and Shoulders pattern has emerged within it, indicating a trend change from bullish to bearish.
Source: Bloomberg
After BTC dipped beneath the formation’s neckline, the pattern was activated.
In order to avoid a further drop, the Bitcoin price must now surge over $30,800.
Santiment’s Bitcoin statistics shows a lackluster market sentiment as traders remain indifferent. On May 18, the S&P 500 fell more than 3%, dragging Bitcoin down with it. Indeed, since the beginning of 2022, the correlation between Nasdaq-100 and Bitcoin has remained tight, making it a good indication for anticipating Bitcoin price movement.
Bitcoin-U.S. Equity Market Correlation. Source: Santiment
Nasdaq-100 futures and other U.S. index futures are down about 1.5 percent at the time of writing. It suggests that the Bitcoin price may continue to fall. In fact, Asian and European stock markets are down more than 2% today.
Whales, on the other hand, appear to be anticipating a bottom in order to continue accumulating. According to Rekt Capital, Bitcoin’s RSI has now reached the level where long-term investors have historically gained the most.
Related reading | Funding Rates Fall To Yearly Lows Following Bitcoin’s Fall Below $29,000
Featured Image by Pixabay | Charts by TradingView
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