The cryptocurrency market – like most traditional markets – is facing a strong crash. Most of the levels at which analysts expected a rebound for bitcoin have already been lost. BTC is firmly below its summer 2021 low of $29,000 today.
However, some are still pinning their hopes on a model that offers a chance to halt the dramatic decline. This is the Confluence Floor Model created by the popular crypto market analyst @TheRealPlanC, BeInCrypto wrote about this model when it was first introduced two months ago.
The Last Hope: Confluence Floor Model
The Confluence Floor Model has been developed from three independent floor models which are based on on-chain indicators. According to PlanC, its historical effectiveness is much higher than the conventionally accepted 200-Week Moving Average (200D SMA), which usually marks an absolute bottom zone for BTC. It is worth noting that the 200D SMA is located at $21,839 today.
So where does the Confluence Floor Model predict a possible bottom for Bitcoin? according to a Tweet Published today, the chart of the indicator reached $27,688 today. This means that at press time the price of BTC is around $28,000, which is roughly in this zone.
At the bottom of your chart, PlanC adds a note: “To remind everyone this is a daily close floor model. I said several times that it is showing intraday wicks at the bottom. As far as I still believe it. It is never broken, so long as I have Seems like it’s useful and once it breaks it’s not.
Historical effectiveness of the model
Despite the fact that the Confluence Floor model was created quite recently, its historical effectiveness seems impressive. The authors often point out that in the entire history of the price of bitcoin, no daily candle has closed below its red line.
According to the data and a recent tweet, the model points to the bottom of previous bear markets and the March 2020 Black Swan crash:
Bitcoin price today is nearly 60% down from its all-time high of $69,000 on November 10, 2021. If this were the bottom of the current bear market, firstly it would be relatively early and secondly it would be relatively low. The last ones Historic bear market has driven BTC down around 80-90% of ATH.
ATH, on the other hand, was first established in April 2021 and later surpassed in November 2021, before BTC prices had not risen as sharply as in previous bulls.
Therefore, the model is likely to work again unless the daily BTC candle closes below the $27,688 level set by the Confluence Floor model. However, if the decline does not stop, the model will be invalidated and crypto market analysts will start looking for the next “hopium”.
For the latest bitcoin (BTC) analysis from BeInCrypto, Click here,