Bitcoin Price Alert: Analyst Says BTC Could Dip Further if History Repeats

A highly regarded cryptocurrency analyst is issuing a cautionary note, suggesting the possibility of Bitcoin (BTC) experiencing a market correction mirroring historical patterns by the year's end.

The pseudonymous trader, Rekt Capital, shares insights with his extensive following of 352,800 users on the social media platform X, suggesting the possibility of Bitcoin declining to $20,000 in the current year. This prediction is based on historical patterns observed in both 2015 and 2019, which are two other pre-halving years.

Rekt Capital states, "BTC: 2015, 2019, and potentially even in 2023? Bitcoin exhibits a recurring pattern of revisiting the macro higher low price (indicated by the blue circle) during its pre-halving phase."

Source: Rekt Capital/X

He points out another compelling factor suggesting that Bitcoin may revisit the $20,000 level: the presence of a gap generated by trading activities on the Chicago Mercantile Exchange (CME) within that specific price range.

Rekt Capital asks, "Should Bitcoin persist in establishing lower price highs, is it conceivable that BTC might close the CME gap around approximately $20,000 either later this year or in the early months of 2024? If this occurs, Bitcoin could potentially return to its macro higher low within this market cycle, marked by the blue circle."

Source: Rekt Capital/X

Additionally, the trader highlights another significant indicator suggesting a potential decline in Bitcoin's value, which is its recent dip below the 50-week exponential moving average (EMA).

The trader notes, "In the previous instance when BTC encountered resistance at the 50-week EMA (depicted in purple), it subsequently retraced by approximately -20%. If historical patterns were to repeat and BTC were to experience a similar -20% retracement from its current position, it could potentially reach the approximate price level of $21,000 (as shown in green). Notably, this aligns with the location of the daily CME gap (highlighted in orange)."

Source: Rekt Capital/X

The trader emphasizes that the scenario of a Bitcoin price dip could be challenged if BTC manages to break through a crucial price threshold in the short term.

"To put it simply, BTC's potential for a ~$31,000 breakout largely hinges on its ability to surpass the significant Lower High resistance level highlighted in black. Until this breakthrough materializes, the possibility of further downside remains open."

According to the trader's analysis, it's improbable for Bitcoin to revisit the $31,000 level until after the next halving event, which is expected to take place in April 2024, reducing miner rewards by half. Furthermore, he anticipates a parabolic rally in the aftermath of the upcoming halving, propelling BTC to exceed $65,000.

"If ~$31,000 represents the peak for 2023, the next opportunity to witness these price levels will emerge several months from now, immediately following the halving event (as indicated by the red box). The key distinction between the current pre-halving period and the post-halving phase is that BTC could potentially retrace from its present position now. However, following the halving, Bitcoin is expected to experience a substantial upward surge from its current price levels."

Source: Rekt Capital/X

At the time of writing, Bitcoin is trading at $26,646, reflecting a 1.3% decrease in value over the past 24 hours.

Sep 22, 2023

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