Bitcoin must hold this level or risk falling to $10,000
Bitcoin has seen a remarkable recovery trend that has seen its price rise above $22,000 once again. This is a welcome development for the digital asset, which has suffered many falls, but it is not all rosy for the cryptocurrency. As the market continues to stay in a bearish trend, there are levels that bitcoin must hold above to maintain such high prices. Otherwise, it risks falling more than 85% from its all-time high.
Bitcoin must be held above $17,000
Many prominent figures in the financial industry have shared their thoughts on where they see the price of bitcoin going. One of them is Clem Chambers, CEO of ADVFN. Chambers, who is also widely known as a financial analyst, has said that for the digital asset to continue to rise, it must ensure that it does not fall below $17,000.
In the interview conducted by Daniela Cambone for Stanberry Research, the financial analyst explained that bitcoin is likely to reach $40,000 if it maintains strong momentum. However, there is still a high chance that the price will reach the dreaded $10,000 if it fails to hold the $17,000-$18,000 level.
Interestingly, although the price of bitcoin is currently up, Chambers believes that the bearish scenario is more likely in this case. This means that the analyst expects the price to fall below $17,000 and reach as low as $10,000.
BTC price drops below $21,000 | Source: BTCUSD on TradingView.com
Chambers’ outlook is in line with what has been recorded in the cryptocurrency market in the past. The assets tend to lose around 80-85% of their prices and even more in extreme cases. This historical trend actually puts bitcoin’s price close to $10,000 before bottoming out.
But what does BTC say?
Most of the pump in the crypto market recently has been thanks to the impending Ethereum merger. The network had taken the rest of the market with it by triggering an increase in interest in the space. But since others like bitcoin are just riding on Ethereum’s coattails, there isn’t much to support it.
Relief rallies that the market is now experiencing have always led to profit taking, which increases the selling pressure in the market. Glassnode points to this in their report, where they note that there is profit-taking at current levels, much like what was experienced in June, which brings the loss-dominant regime to a low of 0.58, putting it firmly in bearish territory.
From this, Chambers’ prediction that bitcoin is more likely to fall below $17,000 than to make it to $40,000 swims into clearer view. However, the profit margins of BTC owners have continued to rise during this time, triggering stronger hold sentiment among investors.
Accumulation has quickly followed this, but not as strong as needed to push the price past $30,000. The number of new BTC addresses has seen a significant tick, as well as the inventory of old BTC addresses, pointing to the accumulation trend.
Featured image from Coinpedia, chart from TradingView.com
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