In his newest video printed on December 21, crypto analyst Rekt Capital tried to reply the query “What’s The Worst Case Scenario For Bitcoin Right Now?”. After reaching a brand new all-time excessive at $108,374 on December 17, the BTC value is down greater than -11%.
How Low Can Bitcoin Price Go?
Rekt Capital put the Bitcoin price pullback in a historic perspective, underscoring the historic significance of weeks 6, 7, and eight in a “price discovery uptrend.” Drawing upon previous cycles equivalent to 2013, 2016–2017, and 2021, he defined that Bitcoin has a powerful tendency to appropriate throughout these particular home windows, with some dips reaching as steep as 34% and even larger.
“Understanding these weeks is crucial because they tend to be problematic for Bitcoin,” Rekt Capital acknowledged, referencing previous cycles the place vital downturns occurred inside this timeframe. For occasion, in week 7 of the 2013 cycle, Bitcoin skilled a dramatic 75% pullback over 13 weeks. Similarly, the 2016-2017 interval noticed a 34% decline in week 8, underscoring the recurring vulnerability throughout these particular weeks.
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As of the present cycle, Bitcoin has undergone a ten%+ retracement, bringing its value right into a traditionally essential assist zone at $96,537 on the weekly chart. Rekt Capital emphasised the significance of this assist degree, noting, “This area of historical support has enabled the move to $108,000.” He cautioned that failure to keep up this assist may set off a extra extreme correction right down to $89,830.
Examining the value motion of the previous couple of days, Rekt Capital identified the emergence of a bearish engulfing candle within the weekly timeframe—a technical indicator usually related to potential reversals. “We’re losing resistances that turned into support,” he noticed. This loss signifies a possible transition right into a corrective interval, as the value struggles to keep up its upward trajectory.
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Rekt Capital additionally identified the significance of sustaining the 5-week technical line in his evaluation. “If we lose this 5-week technical uptrend and the orange trend line, it would be mounting evidence that we might be transitioning into a corrective period,” he warned.
Furthermore, he addressed the CME gap between the $78,000 and $80,000 value ranges, a essential space that has remained unfilled. “Delving into 26%, 27%, 28% dips could fill the entire CME gap,” Rekt Capital famous.
Historically, CME gaps have the tendency to get crammed whereas there are a couple of ones which have by no means been crammed.
Despite all cautionary indicators, Rekt Capital maintains a bullish stance within the long-term “These pullbacks are what enable future uptrends in the parabolic phase of the cycle,” he defined. Drawing from earlier cycles, he illustrated how corrections have traditionally offered the required “breather” for the market.
In the 2021 cycle, for instance, Bitcoin skilled a 16% pullback in week 6 and an 8% dip in week 8, but the general pattern continued upward. Similarly, the present 10% retracement, whereas vital, may function a preparatory part for the next leg of price discovery.
At press time, BTC traded at $95,000.
Featured picture created with DALL.E, chart from TradingView.com
