Has Bitcoin Hit Bottom? Analyst says there is still a long way to go
Bitcoin has been on a month-long rollercoaster in January. The digital asset that enjoyed great success in 2021 has walked into 2022 with bleeding feet. Since then, it has managed to crumble over 50% of its $69K all-time high. As nerves run high, investors are struggling to understand when the onslaught will stop. As bitcoin has yet to see significant support below the $40,000 level, analyst says the worst may be yet to come.
Bitcoin has lost critical support level
Pseudonymous analyst Dave the Wave is known in the crypto world as one of the few to mention the May crash. Last year, when the prices of digital assets like bitcoin went into a frenzy, Dave was one of those who sounded the alarm of the incoming price crash. Not long after, the market had indeed seen a price crash leading to a downward correction of about 50%.
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This time, the analyst issued another warning. Using multiple charts, Dave the Wave explains their analysis of the bitcoin market. The prognosis? Further downward correction towards $25,000 is possible.
BTC starts recovery trend | Source: BTCUSD on TradingView.com
The analysis spreads across multiple tweets in which Dave the Wave informs their 90K Twitter followers about what they expect from the market. First, they analyzed using the Fibonacci extension. After measuring his potential head and shoulders, he ended up at a $25,000 disadvantage.
They note that bitcoin had already breached a critical support level. Among which there is not much support meaning the price of the digital asset tended to continue to fall. “The problem is that once it loses that 40K area, there isn’t much support below,” the analyst said.
BTC Loses Support At $40K | Source: Twitter
What’s in the store?
The next steps, of course, were to find out possible bounce points for the digital asset. They do this by mapping out where there would be a trend reversal. “Another lower level and resistance lines that the price should cross before a trend reversal is even thought of.” Since this call, the price of bitcoin has since fallen below this point, now reaching a whopping $33,000.
BTC misses trend reversal | Source: Twitter
Related literature | Market May Suffer, But Bitcoin And Ethereum Will Retire Stronger, Bloomberg Analyst
Currently, the latest chart in the series shows a possible upward reversal if the digital asset could remain above $35K.
BTC Won’t Hold Above $35K | Source: Twitter
Since the tweet went live, bitcoin has not fared well in the market and has actually fallen below this point. If Dave the Wave’s analysis is anything to go by, then investors may need to brace for impact as the next stop may well be the $25,000 range, which is the next big fulcrum.
Featured image from LinkedIn, charts from Twitter and TradingView.com