Bitcoin has struggled to hold above the $30,000 level after making a brief move on Friday. It has already corrected 3% since and is currently trading at $29,330 with a market cap of $557 billion.
As this happens, Bitcoin could be in for another major price correction going ahead, and if history were to repeat, we could see it going all the way to $15,000 and below. The author of Rekt Capital Newsletter has shared a detailed case study about bitcoin death cross cycles of the past and the Bitcoin corrections that followed.
So what’s a death cross. Death Cross occurs when the 50 EMA crosses UNDER the 200 EMA on a technical chart. In the past decade, Bitcoin has been through a few cycles of death cross in different years.
The author explains instances of the past such as wherein Bitcoin has entered an even steeper correction after the death of the cross. For e.g. in 2013 Bitcoin corrected 70% after the death cross, in 2017 it corrected 65% after the death cross, and in 2019, it corrected 55% after the death cross.
However, 2020 and 2021 were two instances where Bitcoin actually gained massive after the death cross. Meaning, in both instances, the death cross occurred at the bottom.
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Summary:
2013:
• #BTC drops -73% pre-Death Cross
• BTC drops extra -70% post-DC2017:
• -70% pre-DC
• -65% post-DC2019:
• -53% pre-DC
• -55% post-DC2020:
• -63% pre-DC
• +1581% post-DC2021:
• -56% pre-DC
• +141% post-DC2022:
• -43% pre-DC
• ? post-DC— Rekt Capital (@rektcapital) May 20, 2022
Bitcoin Death Cross for 2022.
Rekt Capital analyst believes that this year BTC is more like to follow the trend of 2013, 2017, and 2019. this is because Bitcoin has already corrected more than 36% since January 2022 instead of reversing the trend.
Also, Bitcoin has corrected 43% from its November 2021 peak before hitting the death cross. A similar retracement of 43% after the death cross would mean that the BTC price could reach $22,700.
- A %5 correction from the January 2022 death cross would mean Bitcoin could bottom at $18,000.
- A 65% correction would mean it could bottom at $13,800.
- A 71% crash would mean Bitcoin would bottom at $11,500. Here, the BTC price would have been corrected by more than 80% since its November 2021 peak.
Rekt Capital adds that “What’s interesting about the scenario of a -43% post-Death Cross crash however is that it would result in a $22,000”. The analyst believes it would present fantastic buying opportunities for BTC investors with high ROI.
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