The most important goal of BTC long-term investors is to find the price floor of these cryptocurrencies. Some data show that bitcoin will continue to fall to $ 10,000.
Trading in declining markets has always been very challenging for traders. Most indicators that predict future price behavior are not reliable. These indicators can not predict the exact time of the end of the crypto winter.
Read more: Bitcoin in 2022
Bitcoin is likely to fall to $ 10,000
With the recent rise in the price of Bitcoin to over $ 20,000, many traders thought the market’s largest digital currency had hit rock bottom. The $ 20,000 range is psychologically sensitive for traders. The data show that the short-term rise of Bitcoin is not a logical reason to change its overall trend.
According to research firm Delphi Digital, traders need to be more cautious about investing in bitcoin. Digital Delphi researchers believe that we need to endure more pain before we can be sure that the market has reached its bottom.
In general, the downward cycles of bitcoins in different years are very similar to each other. Comparing the downtrend of Bitcoin in 2017 and 2022, we conclude that the price of BTC is likely to decline further in the near future. In the previous downtrend, the price of the market’s biggest cryptocurrency fell 85 percent, and if history repeats itself, we will see bitcoin fall to $ 10,000.
Research firm Delphi Digital also announced its forecast for the future of Atrium prices. The price of ETH in the previous downtrend fell to 95%. If this happens again, the price of Atrium will reach $ 300. Delphi Digital said in this regard:
The risk of a recurrence of the previous fall is greater than most people anticipate. If Bitcoin fails to maintain the $ 14,000 to $ 16,000 support range, the risk of a fall will increase.
Bitcoin Technical Analysis
Examining the price behavior of Bitcoin in previous downtrends, we find that the end of the downtrend coincided with the market entering a state of saturation. In the Bitcoin chart, the Bitcoin Relative Strength Index (RSI) has fallen below 30 (sell-off) for the third time in 14 weeks. Every time the price of bitcoin reaches this level, we can guess that we are approaching the price floor of the market.
Some people consider comparing the current downtrend with previous cycles as a signal to enter the market. Delphi Digital data shows that in previous declining markets, bitcoin has been fluctuating in a turbulent range for several months and has finally improved.
Bitcoin fell below its 200-week moving average for the first time since March 2020. In previous downtrends, bitcoin had been below the 200-week moving average for several weeks. These data show that the Bitcoin crash is coming to an end.
Will the Bitcoin crash continue?
In most cases, traders’ final sales will occur at the end of a downtrend or the beginning of the next uptrend. Traders’ frustration has now reached its highest level since March 2020. This is less than the record set in 2018.
The main reason for the decline in financial markets in 2022 is the increase in bank interest rates in the United States. As the Federal Reserve raises bank interest rates, bitcoin and other risky assets will face more price corrections.
According to Glassnode, the index of bitcoin interest rates is currently at 54.9%. In previous declining markets, the index had fallen as much as 40 percent. Given these data, it is likely that the downtrend will continue.
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Source: cointelegraph