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

NewsBTC
Updated
Mitrade
coverImg
Source: Shutterstock

In his latest video published on December 21, crypto analyst Rekt Capital tried to answer the question “What’s The Worst Case Scenario For Bitcoin Right Now?”. After reaching a new all-time high at $108,374 on December 17, the BTC price is down more than -11%.

How Low Can Bitcoin Price Go?

Rekt Capital put the Bitcoin price pullback in a historical perspective, underscoring the historical importance of weeks 6, 7, and 8 in a “price discovery uptrend.” Drawing upon past cycles such as 2013, 2016–2017, and 2021, he explained that Bitcoin has a strong tendency to correct during these specific windows, with some dips reaching as steep as 34% or even higher.

“Understanding these weeks is crucial because they tend to be problematic for Bitcoin,” Rekt Capital stated, referencing past cycles where significant downturns occurred within this timeframe. For instance, in week 7 of the 2013 cycle, Bitcoin experienced a dramatic 75% pullback over 13 weeks. Similarly, the 2016-2017 period saw a 34% decline in week 8, underscoring the recurring vulnerability during these specific weeks.

As of the current cycle, Bitcoin has undergone a 10%+ retracement, bringing its price into a historically critical support zone at $96,537 on the weekly chart. Rekt Capital emphasized the importance of this support level, noting, “This area of historical support has enabled the move to $108,000.” He cautioned that failure to maintain this support could trigger a more severe correction down to $89,830.

Bitcoin price analysis weekly chart

Examining the price action of the last few days, Rekt Capital pointed out the emergence of a bearish engulfing candle in the weekly timeframe—a technical indicator often associated with potential reversals. “We’re losing resistances that turned into support,” he observed. This loss signifies a potential transition into a corrective period, as the price struggles to maintain its upward trajectory.

Rekt Capital also pointed out the importance of maintaining the 5-week technical line in his analysis. “If we lose this 5-week technical uptrend and the orange trend line, it would be mounting evidence that we might be transitioning into a corrective period,” he warned.

Bitcoin weekly chart

Furthermore, he addressed the CME gap between the $78,000 and $80,000 price levels, a critical area that has remained unfilled. “Delving into 26%, 27%, 28% dips could fill the entire CME gap,” Rekt Capital noted.

Historically, CME gaps have the tendency to get filled whereas there are a few ones which have never been filled. Despite all cautionary signals, Rekt Capital maintains a bullish stance in the long-term “These pullbacks are what enable future uptrends in the parabolic phase of the cycle,” he explained. Drawing from previous cycles, he illustrated how corrections have historically provided the necessary “breather” for the market.

In the 2021 cycle, for example, Bitcoin experienced a 16% pullback in week 6 and an 8% dip in week 8, yet the overall trend continued upward. Similarly, the current 10% retracement, while significant, could serve as a preparatory phase for the next leg of price discovery.

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

Bitcoin price

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP crash, wiping $1.17 billion from the marketBitcoin (BTC) price trades below $98,000 on Friday after declining more than 6% this week.
Author  FXStreet
Dec 20, Fri
Bitcoin (BTC) price trades below $98,000 on Friday after declining more than 6% this week.
placeholder
Bitcoin Miner MARA splashes $1.53B, becomes second-largest BTC holder globallyMARA Holdings has strengthened its position as a Bitcoin holder by acquiring 15,574 Bitcoin at an average price of $98,529 per coin. The latest $1.53 billion investment brings MARA’s total holdings to 44,394 BTC. At the current spot price of $100,151 per Bitcoin, the company’s holdings are valued at approximately $4.45 billion.
Author  Cryptopolitan
Dec 20, Fri
MARA Holdings has strengthened its position as a Bitcoin holder by acquiring 15,574 Bitcoin at an average price of $98,529 per coin. The latest $1.53 billion investment brings MARA’s total holdings to 44,394 BTC. At the current spot price of $100,151 per Bitcoin, the company’s holdings are valued at approximately $4.45 billion.
placeholder
Why Altcoins Are Plummeting TodayThe cryptocurrency market is seeing a day of big sell-offs in Thursday's trading. Bitcoin's token price was down 4.8% over the previous 24 hours of trading as of 4 p.m. ET, and Ethereum's price was down 9.2% over the period. The valuation pullback has been even more pronounced in the altcoin space.
Author  The Motley Fool
Dec 20, Fri
The cryptocurrency market is seeing a day of big sell-offs in Thursday's trading. Bitcoin's token price was down 4.8% over the previous 24 hours of trading as of 4 p.m. ET, and Ethereum's price was down 9.2% over the period. The valuation pullback has been even more pronounced in the altcoin space.
placeholder
SEC approves Hashdex Nasdaq and Franklin crypto index ETFsNasdaq and Cboe BZX Exchange are changing rules to list ETPs linked to spot bitcoin and ether. The SEC is reviewing these products to ensure whether they follow regulations and protect investors. This move helps bring digital assets into traditional finance ecosystem by preventing from frauds.
Author  Cryptopolitan
Dec 20, Fri
Nasdaq and Cboe BZX Exchange are changing rules to list ETPs linked to spot bitcoin and ether. The SEC is reviewing these products to ensure whether they follow regulations and protect investors. This move helps bring digital assets into traditional finance ecosystem by preventing from frauds.
placeholder
Bitcoin Price Annual Forecast: 2025 outlook brightens on expectations of US pro-crypto policyBitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December.
Author  FXStreet
Dec 19, Thu
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December.