The turn in sentiment has everyone guessing where the now bearish cryptocurrency could fall to, but according to past cycles, it could get a lot worse before it gets better. Here’s more on why Bitcoin price could fall back toward $14K before the bear phase is over.
Bitcoin Yearly Candle Turns Bearish, But What About The Bull Market?
The arguments are all similar: if that was the top in Bitcoin this was the shortest and weakest bull market yet. The cryptocurrency would have fallen short of expectations by hundreds of thousands of dollars.
That thought alone could result in some extremely bearish sentiment – even more negative than what’s going on across the market currently.
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There are calls for $20K BTC as the bottom, which would be another 50% from here. Another sizable drop seems unlikely given the potential the asset has, but as a “highly speculative” asset Bitcoin is extremely volatile.
That volatility could result in a full retracement back to $14K.
The yearly candle never touched the previous support level | Source: BLX on TradingView.com
Monthly timeframes are even more dominant, and there’s a bearish evening star reversal pattern now confirmed on the monthly chart. Getting even more distant, things could be even more bearish.
The short yearly candle and large wick to only the upside is unlike any other annual Bitcoin price candle before it. The candle is currently bearish, but the yearly chart could say more.
In the past, the yearly candle to follow a breakout always comes back to nearly retest the previous yearly close that resulted in a bear market. It happened in the last two bull markets, but hasn’t during the current bull market. This time is clearly different so far, but will it stay that way?
The same chart on weekly timeframes makes the picture clear | Source: BLX on TradingView.com
Related Reading | Bitcoin Bear Market Comes Down To Pivotal June Close
Finally, 78% would closely match the 2013 retrace that crypto investors should be hopeful repeats. If it does, the final leg up of the bull market could be mind-blowing before a more extend bear market takes place.
Featured image from iStock Photo, Charts from TradingView.com