What’s The Worst Case Scenario For Bitcoin Right Now? Analyst Explains

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As an analyst with over a decade of experience in the cryptocurrency market, I have witnessed the ebb and flow of Bitcoin‘s price action more times than I care to count. The current pullback is a stark reminder of the volatile nature of this asset class, but it’s also an opportunity to learn from history.

In his recently posted video on December 21st, financial analyst Rekt Capital explored the potential question “What’s the Most Pessimistic Possibility for Bitcoin Currently?”. Following a record peak of $108,374 on December 17th, the price of Bitcoin has dropped by over -11%.

How Low Can Bitcoin Price Go?

In simpler terms, Rekt Capital emphasized the significance of weeks 6, 7, and 8 in a bullish trend for Bitcoin price growth, often referred to as ‘price discovery uptrend.’ Using examples from previous cycles like 2013, 2016-2017, and 2021, he pointed out that it’s common for Bitcoin to experience pullbacks during these specific periods. These corrections can sometimes be quite significant, with the dips reaching as far as a 34% decrease or even more.

It’s essential to grasp these upcoming weeks since they often pose challenges for Bitcoin, as Rekt Capital pointed out, drawing attention to past instances where significant drops took place within this timeframe. To illustrate, during week 7 of the 2013 cycle, Bitcoin plummeted by approximately 75% over a span of 13 weeks. Likewise, in week 8 of the 2016-2017 period, there was a 34% decrease, highlighting a persistent pattern of vulnerability during these specific weeks.

At the moment, Bitcoin has experienced a drop exceeding 10%, which has placed its price within a significant support region around $96,537 on the weekly graph. Rekt Capital highlighted the relevance of this support area, stating, “This historical support level has facilitated the rise to $108,000.” He warned that if this support isn’t sustained, it could lead to a more substantial correction down to approximately $89,830.

Looking at recent market trends, Rekt Capital noticed the appearance of a weekly bearish engulfing candle – a technical signal frequently linked with possible price reversals. He commented, “We’re seeing previous resistances now turning into supports.” This shift suggests a potential move towards a corrective phase, as the price finds it challenging to sustain its uptrend.

Rekt Capital underscored the significance of preserving the five-week technological trend in his evaluation. He cautioned that if we were to break this five-week technical uptrend and the orange trend line, it could indicate a growing likelihood that we might be moving into a corrective phase.

As a researcher, I’ve found an interesting observation regarding the Commodity Market Exchanges (CME) price levels. Specifically, there seems to be a void between the $78,000 and $80,000 price points that has yet to be fully addressed. Rekt Capital pointed out that exploring dips around 26%, 27%, or 28% could potentially fill this entire gap.

Historically, CME gaps tend to be filled most of the time, but there are a few exceptions where they haven’t been filled yet.

During the year 2021, Bitcoin had a decline of 16% in week 6 and a drop of 8% in week 8. Despite these setbacks, its overall trajectory remained upward. In a similar fashion, the current 10% decrease might be seen as a preparatory stage for the next phase in its price exploration.

At press time, BTC traded at $95,000.

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2024-12-23 12:40