A closely followed crypto strategist is mapping out two potential bottom targets for Bitcoin as BTC loses nearly 30% of its value in just seven days.
Crypto analyst Rager tells his 207,100 Twitter followers he’s keeping a close watch on the 200-week simple moving average (SMA), which he says has marked the bottom for Bitcoin during the 2015 and 2018 bear markets and the 2019 Covid-induced collapse.
“The simple moving average, this blue one, is really what a lot of people are watching when it comes to buying the dip opportunities. Historically, [the 200-week SMA] has been basically where Bitcoin closed above on the weekly or the higher timeframes…
There’s a good possibility that we see that the $22,300 where the moving average is at now is a real possibility of a potential bottom.”
At time of writing, Bitcoin is changing hands for $21,691. Even though BTC is below the 200-week SMA, Rager highlights that the bearish move could be a wick that gets bought up.
“Even if it wicks below it, I think you’re going to see a lot of people, even with a wick, especially bigger players, [will] probably buy into that.”
Although the 200-week SMA has historically allowed Bitcoin to print bear market lows, Rager says BTC can still go lower if you’re looking at the percentage of retrace from the all-time high.
“If you look back at 2013 to 2015, you saw an 80% decrease in price there. The last all-time high [$20,000], you saw an 83%, 84% pullback from December 2017 to November 2018… So basically over 80% pullbacks historically from the all-time high during market cycles.
Now the problem with that is that Bitcoin from the all-time high of $69,000 has only went as far as 63% on that previous wick and even if we go down to the 200-week simple moving average, that’s only about 67%, 68% from the all-time high.”
According to Rager, an 80% drop from BTC’s all-time high will drive Bitcoin to around the $14,000 price level. He highlights that the price area offers solid support for BTC from a high timeframe perspective.
This block zone right here from $17,000 down to $14,000 roughly, you’re going to notice that’s also the area where price rejected off that during the uptrend of 2019 after the bottom and before the black swan event. Then it came back up, had some trouble, finally broke above, came back down and retested level and went back up. So I think if it does break below the 200-week SMA, I do think that that’s a good place to buy.”
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