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Bitcoin’s potential bottom after 50% drop

Analyst Benjamin Cowen has identified a potential bottom for Bitcoin as the leading cryptocurrency has fallen more than 50% from its all-time high.

In one interview Cowen, who is new to financial freedom on the InvestAnswers YouTube channel, says $30,000 is acting as a key price point for Bitcoin.

“$30,000 is clearly an important area. I would say that there is no need for an absolute lower limit, because if there is a lower price then you have to define a new lower limit. But I think there is definitely an opportunity to hold different levels and the further the price goes down, the more likely we are to hold that level.

$30,000 is definitely an interesting area on a dip. I don’t want to scare anyone, but I also don’t want to say that the price can’t go under $30,000 because it can. BTC fell below $30.00 in summer and January…”

The analyst added that a “full bear case” would take Bitcoin to around $20,000.

According to Cowen, one thing to watch out for with Bitcoin is the oversold Relative Strength Index (RSI). This indicator tracks whether an asset is over- or undervalued. He pointed out that it is close to levels not seen since the March 2020 pandemic crash, suggesting BTC is currently undervalued.

“BTC could get worse before it gets better. Note that the weekly RSI is quite low, but the possibility of a further decline is not excluded. The value is at the March 2020 lows, but in order to reach the March 2020 lows, it really needs to sustain this downtrend for a few more weeks. To get back to where it was at the end of 2018, we may need to view the price action more or less as a slow decline. That could still happen in the next few months and that’s why I said before that I think Q1 will continue to fall…

When the market is down, you really should get into the market. A bull market makes you money and a bear market makes you rich.”

Seller’s bitcoin price target

Bitcoin price action continues to weaken as it has broken below a key support level. The popular chart pattern forecasts another 16% drop for the top cryptocurrency.

Bitcoin price fell below the lower boundary of a descending parallel channel on Jan. 21, possibly dropping another 16% and heading towards $29,026.

The first line of defense stands at the July 25 low of $33,851. This could be followed by $31,973 and $30,151, respectively, with the June 27th and June 26th lows, respectively.

Eventually, if bitcoin price breaks below the above support levels, BTC could target a downside move at $29,026 based on a corrective technical pattern consistent with the 127.2% Fib retracement level.

Investors should note that if BTC falls below the above bearish target, the price could drop to lower levels not seen since January 2021.

However, if the buying pressure increases, Bitcoin will face immediate resistance at the bottom of the chart at $35,570.

Another hurdle may arise at the 78.6% Fib retracement level, which coincides with the middle border of the descending parallel channel.

BTC/USDT 12 hour chart | Source: TradingView

A spike in buy orders could prompt Bitcoin to rally to the chart’s upper boundary at $40,878, where the 61.8% Fib retracement line and the 21-12 hourly simple moving average cross.

Higher hopes are aimed for a bounce off the upper trendline of the descending parallel channel pattern, but several hurdles may emerge. The first hurdle comes in at the 50% retracement at $43,016, which coincides with the 50-12 hour SMA, then at the 38.2% Fib retracement at $45,154.

You can see the bitcoin price here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Minh Anh

According to AZCoin News

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