Here’s why according to DataDash

Nicholas Merten – a seasoned cryptocurrency analyst and founder of DataDash – has called for Bitcoin to drop to $14,000 after plunging below $19,000 over the weekend.

The analyst cited both technical and macroeconomic factors, including one indicator he calls “absolutely damning” for Bitcoin’s price.

Deeper Water for Bitcoin?

In a video published on Monday, Merten pointed out that Bitcoin’s 200-week moving average (WMA) has turned into a level of price resistance, rather than support. The primary cryptocurrency has almost always remained above the average throughout its existence, with rare dips below it marking cyclical bottoms.

However, Bitcoin and the crypto markets fell below this level during the crypto market crash in June, which saw Bitcoin plummet to $17,600. It has since ranged within the low twenties – barely below the 200 WMA of around $23,000.

Given its inability to break back above this level, the analyst claimed that Bitcoin is now in “uncharted territory.”

“We have never seen these circumstances play out for Bitcoin,” he said. “Usually prices break below the weekly moving averages, the rallies break out of that, due to people buying into the capitulation.”

The founder concluded that Bitcoin’s recent price action likely signals “the end of a decade-long secular bull market” that Bitcoin has experienced throughout its life, along with stocks. As such, he suspects there may no longer be one leading asset compared to other commodities and shares.

According to the analyst, the cryptocurrency’s next bottom could be close to $14,000. This would mark an 80% correction from the all-time high, similar to previous bear markets.

“This is the bare minimum we can ask for at this point,” Merten said, adding that investors should consider the possibility of an even steeper decline to $10,000.

The merge and the macro

Commenting on Ethereum’s recent merger, Merten called the upgrade “an obvious one”buy the hype, sell the news‘ event.” He expects the second-largest cryptocurrency to retest the $800 to $1,000 level, and possibly lower.

Contributing to potential declines is the Federal Reserve’s upcoming interest rate decision, where the market expects another increase of 75 basis points. Hawkish monetary policy has coincided with major declines in stocks and crypto through 2022.

These policies have created a higher cost of shelter in the United States, including sudden increases in fixed-rate mortgages. It has also caused 2-year government bond yields to invert the yield on the 10- and 30-year equivalents.

Despite the potential dangers to the economy this may pose, Merten does not expect the central bank to stop raising interest rates until it can safely curb inflation.

“This could very well be depression levels of recession,” he said.