Bitcoin (BTC), the biggest cryptocurrency by market capitalization, has confronted a setback in its latest positive factors after failing to consolidate above the $27,000 degree. With no constructive macro information to drive BTC past higher resistance traces, trade consultants are in search of a chart evaluation that means BTC could also be on the verge of a big transfer towards $20,000.
This potential cheaper price level might function a brand new increased low in Bitcoin’s 1-week chart, harking back to its trajectory in 2019 earlier than the halving occasion.
Bitcoin Chart Flashing Crimson
Crypto analyst Rekt Capital just lately shared a chart on X (previously Twitter) outlining Bitcoin’s potential downward trajectory. In response to Rekt Capital’s evaluation, Bitcoin might revisit the $20,000 mark, establishing a brand new increased low on its 1-week chart, mirroring the worth motion noticed in 2019 earlier than the halving occasion.
Rekt Capital highlights the importance of a revisit to the Macro Greater Low within the present cycle, which might happen in early 2024, coinciding with the halving yr. Within the four-year cycle, this could signify that the draw back wick of Candle 4 would type a Macro Greater Low relative to Candle 3, as seen in one other chart shared by Rekt beneath.
Whereas some argue that one other drop into the Macro Greater Low is unlikely because of the COVID-19 crash in March 2020 as a black swan occasion, Rekt Capital emphasizes that the magnitude of a possible upcoming drop might differ significantly.
The COVID-19 crash resulted in a 72% drop from the 2019 native high to the March 2020 increased low. Nonetheless, if the 2023 native high have been round $31,000, it could solely require a 37% drop to revisit the upper low.
Whereas a repeat of the -72% crash is unlikely, Rekt Capital means that Bitcoin might retrace -37% while not having one other black swan occasion.
With Bitcoin being 210 days away from halving in April 2024, Rekt Capital parallels the 2019 cycle, throughout which BTC skilled a reduction rally earlier than forming one other decrease excessive.
Throughout, Bitcoin seems to be experiencing the same reduction rally. Rekt Capital means that Bitcoin might not want a drastic crash or one other black swan occasion over the next months to succeed in its Macro Greater Low on this cycle however reasonably a retracement of roughly 27% from present costs.
At the moment, the biggest cryptocurrency out there is buying and selling at $26,600. Regardless of experiencing a retracement beneath the $27,000 degree, Bitcoin has achieved a slight revenue of 0.7% throughout the 24-hour.
As highlighted by Rekt Capital, it stays unsure whether or not Bitcoin will comply with the trail noticed in 2019. Nonetheless, what is clear is that the BTC market is exhibiting indicators of stagnation, with a possible worth breakout looming on both facet.
Featured picture from iStock, chart from TradingView.com