Bitcoin (BTC) is experiencing a significant drop of up to 15% since the weekend, leading traders and analysts to speculate on where the market might bottom out and how soon it could happen. As of April 16, BTC/USD is hovering around $62,000, failing to sustain a significant rebound after challenging $61,000. Analyst Mark Cullen suggests that Bitcoin could face a final downmove to around $59,000, based on the Elliott Wave method. If this were to happen, it would mark the lowest BTC price since late February and a drawdown of around 20% from recent all-time highs.
Another concern for Bitcoin is the loss of its 10-week simple moving average (SMA), which currently stands at $64,130. Analyst Matthew Hyland emphasizes the importance of the upcoming weekly close in determining the staying power of the current pullback. Full candles below the 10-week SMA have not been observed since mid-2023.
Binh Dang, a contributor to on-chain analytics platform CryptoQuant, suggests that Bitcoin bulls may face frustrating conditions in the longer term. He analyzes the Adjusted Cumulative Value Days Destroyed (CVDD) metric and predicts that BTC/USD may remain lower for an extended period before rechallenging its highs. The CVDD metric measures the number of days a coin has been in its wallet when it moves on chain and multiplies it by the current price. Binh anticipates Bitcoin to test and accumulate at Phase 2 (orange line) before a potential rebound. However, he does not expect the current downmove to reach the panic levels seen during the COVID-19 cross-market crash in March 2020, with a worst-case scenario being a drop to the Phase 1 line at just under $40,000.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.