Crunch Time for Bitcoin: Unveiling Bottom Scenarios and Market Trends
The founders of Glassnode, a cryptocurrency analytics company, believe that a potential bottom for Bitcoin (BTC) could be established following the recent market decline.
Jan Happel and Yann Allemann, who go by the name “Negentropic,” have outlined two potential scenarios that could lead to a local bottom for Bitcoin.
According to Happel and Allemann, Bitcoin might experience a gradual decline toward the range of $24,800 to $25,000, or it could undergo a more rapid liquidation event before finding its bottom.
#Bitcoin Risk Signal at 100
2 possible short-term scenarios.
1. Slow bleed to $24.8k – $25k
2. Fast, aggressive wick that gets bought up fastEither way, we'll bottom out shortly after 1 plays out
We've seen these two scenarios play out in the past whenever the $BTC Risk… pic.twitter.com/ONOKYzKQoy
— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) August 18, 2023
Regardless of the specific path, they anticipate a bottom forming after either scenario plays out. Historical data has shown these two patterns occurring whenever the BTC Risk Signal reaches 100.
Their analysis of the chart suggests that Bitcoin has historically undergone corrective movements once the Risk Signal hits 100.
Well-known anonymous cryptocurrency analyst Rekt Capital has also shared insights on the current state of BTC. The analyst points out a bearish double-top pattern, indicating weakness in Bitcoin’s performance.
The first peak of the double top took around 91 days to form, while the second peak emerged in just 63 days.
READ MORE: Beware the Bitcoin Bear: Analyst Predicts Prolonged Slump
This indicates that while the first peak gradually decreased in value, showing respect for support levels before eventually breaking them, the recent crash disregarded support levels during its descent.
This situation highlights the lack of significant buying pressure in the region where the decline occurred.
The absence of strong buying interest prevents a meaningful change in the price movement’s direction.
Furthermore, ongoing volume levels suggest that selling pressure might not have reached its peak yet.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
