Published June 21, 2022
Last week while the BTC/USDT pair dropped below $20000, the Fear and Greed Index hit the 6% mark, indicating extreme fear among market participants. However, although the coin price has corrected 74.3% since the November All-Time High of $68789, the historical data reveals that such correction is common for Bitcoin price.
The Bitcoin(BTC) price has been constantly downfall for the past eight months. This extended correction has depreciated the coin price by 74.3% as it recently plunged to a low of $17708.
However, the historical records indicate that such long corrections are normal for the world’s largest cryptocurrency. Excluding the April-May 2021 correction triggered by the coronavirus pandemic, the technical chart shows a 70-80% correction is unexceptional for Bitcoin.
In 2014, the BTC price went down from a high of $1170 to $163, registering an 86% correction. In 2018, the BTC/USDT slumped from around $19641 to $3084, accounting for an 84% fall. From June 2019-March 2020, the coin price plunged from $13876 to 3900, indicating a 71.8% drop.
Furthermore, last week the coin buyers managed a weekly closing above the combined support of $20000 and the 0.786 Fibonacci retracement level. Moreover, the long-tail rejection attached to the weekly candle validates the presence of high demand pressure.
The BTC price currently trades at $21458, with an intraday gain of 4.17%. A potential recovery should surge 35% to challenge a crucial supply zone formed by the $33000 psychological mark 200-day EMA and 0.618 FIB level.
A weekly-candle closing above this overhead resistance should encourage further rally.
The daily-RSI slope dives into the oversold region amid the June’sJune’s second-week sell-off. The 27% RSI value indicates an overextended downtrend and should encourage interested buyers to enter at a discounted price.
However, the BTC price trading below the crucial EMAs(20, 50, 100, and 200) reflects an overall downtrend. Moreover, the potential rally may witness significant resistance from each EMA slope.
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