The Bitcoin price is already down greater than -22% for the reason that mid-March high over $73,000. While BTC is currently stabilizing above $57,000 following the recent price crash, there might be much more downside ahead if history repeats, in line with Jacob Canfield, a trading mentor on the Trading Mastery. Canfield’s latest evaluation points to a possible further decline within the Bitcoin price, potentially reaching lows not seen for the reason that starting of the 12 months.
Why Bitcoin Price Could Crash One other 33%
Canfield’s evaluation on TradingView hinges on historical patterns observed in Bitcoin’s pricing trends. “Historically, Bitcoin likes to retest the yearly open levels,” Canfield notes. In response to him, these retests can either confirm bearish or bullish trends but are a consistent feature in Bitcoin’s market behavior. Since 2017, every year’s opening price has been retested throughout the 12 months, with the notable exceptions of 2023 and 2024 (up to now).
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“Since 2017, the yearly open has been retested every 12 months except 2023 and 2024,” Canfield remarked. As an example, the bearish retest of the 2018 opening BTC price occurred right before the COVID-19 pandemic crash, and similar patterns were observed in subsequent years. “Even the 2019 yearly open at $3,850 was retested through the 2020 Covid Crash,” the crypto analyst added.
Furthermore, the 2020 yearly open was retested throughout the first 3 months of 2020. The 2021 opening price was also retested and marked the bottom point before a big rally that led to a peak of $69,000, just before the collapse of FTX. “The 2022 Yearly open was a bearish retest just like 2018 before the lows around $16,500. Much like the 2021 yearly open retest giving us our bottom, this gave us our local top,” Canfield observed.
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Looking ahead, the crypto analyst speculates in regards to the potential bottom for Bitcoin in the approaching months. “Here is where it gets interesting. The 2023 and 2024 yearly opens haven’t been retested yet. The query is, will we form a bottom on the 2024 yearly open before more all time highs or will we capitulate all the way in which all the way down to the 2023 yearly open at $16,500 like we did in 2019.”
Crucial Indicators To Watch
The reply may lie in several technical indicators that Canfield considers pivotal. First, Canfield mentions the 0.618 Fibonacci retracement level. This indicator aligns closely with the projected yearly open for 2024, suggesting the next likelihood of finding support within the $38,000 to $42,000 range. Notably, a price crash this low would mean one other -33% for BTC holders.
The second crucial indicator is the weekly 200 EMA/MA Ribbon. This indicator can also be converging across the 2024 opening price. It reinforces the potential for this level to act as a robust support zone. “This offers us the next probability that we’ll form a bottom around that region and the 2023 yearly open may act just like the 2017 yearly open and never get retested,” Canfield speculates.
Despite the bearish outlook, Canfield’s evaluation leaves room for various scenarios, emphasizing the cyclical nature of Bitcoin’s market dynamics and the role of historical precedents in forecasting future trends. “Either way, I believe this offers us a high likelihood goal based on historical precedence for where we may find a neighborhood bottom,” he concludes, inviting further discussion and evaluation from the community.
At press time, BTC traded at $57,479.
BTC must reclaim the 200-week EMA (blue line), 1-day chart | Source: BTCUSD on TradingView.com
Featured image from iStock, chart from TradingView.com