Why Bitcoin Price Could Be Destined To Go Back To $ 14,000

Bitcoin price just experienced its worst high timeframe correction in years, falling 50% and fueling fear in the market.

The mood reversal has everyone guessing where the now bearish cryptocurrency might fall, but according to past cycles it could get a lot worse before it gets better. Here’s more on why Bitcoin price could drop to $ 14,000 before the bear phase is over.

The annual bitcoin candle turns bearish, but what about the bull market?

The arguments are all similar: if that was the top in Bitcoin, it was the shortest and weakest bull market yet. The cryptocurrency would have fallen short of expectations by hundreds of thousands of dollars.

That very thought could lead to an extremely bearish sentiment – even more negative than what is currently going on in the market.

Related reading | Bulls watch out: bears have only now taken control of Bitcoin

There are claims for $ 20,000 BTC to bottom out, which would be another 50% from here. Another sizeable decline seems unlikely given the potential the asset has, but as a “highly speculative” asset, Bitcoin is extremely volatile.

This volatility could result in a full retracement to $ 14,000.

The candle of the year never touched the previous level of support | Source: BLX on TradingView.com

Why BTC Could Fall To $ 14,000 Per Coin This Year

In technical analysis, the highest timeframes are always most important. Bitcoin was bullish on a daily basis, but the weekly MACD which turned bearish signaled the high before the decline even began.

Monthly time frames are even more dominant and a bearish evening star reversal pattern is now confirmed on the monthly chart. If you get farther away, things could get even more bearish.

The short annual candle and the large wick only upwards are different from all other annual Bitcoin price candles before it. The candle is currently bearish, but the yearly chart could say more.

In the past, the annual candle keeps coming back after a breakout to almost retest the previous year-end that led to a bear market. It happened in the last two bull markets, but not during the current bull market. This time is clearly different so far, but will it stay that way?

The same graph on weekly time frames makes the picture clear Source: BLX on TradingView.com

If Bitcoin price were to go back to its earlier annual opening before the start of the bear market, it would drop the leading cryptocurrency by market cap to $ 14,000, a decline of around 78%.

78% are significant for several reasons. For one, it is below the parabolic curve retracement requirements of more than 80%, so it is not yet a bear market by BTC standards.

Related reading | The Bitcoin bear market hits the crucial end of June

78.6% is an important Fibonacci retracement level. Bitcoin price has already dropped to the 50% mark, with 61.8% being the middle ground that could also serve as a breakpoint.

After all, 78% would match the 2013 response that crypto investors should be hopeful reps. If so, the final bull market surge could be overwhelming before a longer bear market takes place.

Featured image from iStock Photo, charts from TradingView.com

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