Bitcoin (BTC) is trading at its lowest level since mid-December 2020 on June 13, but the bottom could be anywhere.
As the weekend sell-off intensifies, BTC/USD has broken below its true value for the first time since March 2020, data from Cointelegraph Markets Pro and TradingView confirm.
bitcoin sticks to the real price
At around $23,400, the real price – the average price at which each BTC last moved – is acting as the first solid support ever on the lower time frame.
Previous levels, highlighted as potential bottoms, have failed to hold, and sentiment continues to favor further selling pressure, thanks to the aftermath of Celsius, inflation and Upcoming action by the United States Federal Reserve.
Meanwhile, where BTC/USD could put in a final macro floor is now a hotly debated topic.
The first port of call for a significant drop is the 200-week simple moving average (200 SMA), traders and analysts agree.
At $22,370 as of June 13, the 200 SMA has acted as key support throughout bitcoin’s lifetime, marking generational spot price bottoms with only brief wicks below it.
The 200 SMA has never broken out of its uptrend, and it is expected that reaching it will bring relief to the bulls.
“People are looking to buy there, it’s going to more than likely bounce in that area,” Josh Rager argued In a dedicated video update on the day.
Describing the surge in the 200 SMA as a “self-fulfilling prophecy” thanks to the range of interest in it, he cautioned that there is a guarantee that BTC/USD will not continue south this time.
This is thanks to historical precedent that shows Bitcoin is down 84% from its latest all-time high. Thus at $69,000, such a bottom would only be at $11,000.
“That would be damaging; I don’t think the price goes down that much, I mean you are basically looking at the full retrace of the whole bull market and we have never seen that,” Rager continued.
Instead, the areas of interest are the 2017 highs near the $20,000 level as well as the immediate downside that extended to $17,000. He added that it is also worth paying attention to at $14,000, which equates to an 80% retracement from the current all-time high.
As Cointelegraph reported, several of those levels have already been outlined as potential bottoms by others, among them trader and analyst Reckitt Capital.
In a series of tweets on June 13, the importance of the 200 SMA came to the fore again.
historically, #B T c 200-week MA . Wicked down from -14% to -28%
This time a -14% wick ~$19000 . will turn into $BTC
-28% wick would mean BTC could reach ~$15500 before turning upside down#crypto #bitcoin pic.twitter.com/j9tal7ZSt0
— Rect Capital (@rektcapital) 13 June 2022
Fed Bulls’ Last Chance Becomes Saloon
At the time of this writing, meanwhile, BTC/USD has managed to avoid a fresh dive in line with the US stock markets.
RELATED: Lowest weekly close since December 2020 – 5 things to know about Bitcoin this week
The S&P 500, in contrast, fell 3% within the first hour of trading, while the Nasdaq Composite Index dropped 3.6%.
To halt crypto’s decline, some claim, only the Fed can step in, reversing monetary tightening as rising interest rates stifle growth.
Economist, trader and entrepreneur Alex Krueger said, “Understand how little this crypto dump has to do with Celsius and stETH drama and the widespread panic in all risk assets (equities and crypto alike) and broken charts.” Told Twitter followers on the day, bypassing the news of Celsius.
a next post Reading:
“It’s just my opinion, I’m often wrong. My guess is that 1.2x has been added to the Celsius fuel. Everyone’s making it up about Celsius. Look at the media tomorrow. But Friday’s CPI numbers and shares are falling. It wouldn’t have happened without it.”
Still, confusion was few and far between for long-time bitcoin market participants. If BTC/USD breaks below $20,000, it will be the first time the all-time high of the previous halving cycle will be surpassed.
#irrigated FOMC starts tomorrow. 50 bps vs 75 bps increase likely. pic.twitter.com/ftdQ9ZpmcL
— Ansel Lindner (@AnselLindner) 13 June 2022
Charles Edwards, CEO of asset manager Capriole, said, “Without the Fed pivot, I expect this to be the first cycle for bitcoin to drop below previous cycles.” concluded,
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
