Bitcoin (BTC) is trading at its lowest level since mid-December 2020 on June 13, but the bottom could be anywhere.
As the weekend sell-off intensifies, the BTC/USD pair has currently fallen below its realized price for the first time since March 2020, data from Cointelegraph Markets Pro and TradingView confirm.
Bitcoin is holding on to its realized price
Around $23,400, the realized price – the average mark at which each token last moved – is acting as the first strong support so far on lower time frames.
Previous levels, including those flagged as possible price bottoms, have not held, and sentiment continues to favor further selling pressure on the back of fallout from the suspension of Celsius withdrawals, inflation, and upcoming Fed moves. from the United States.
Meanwhile, where BTC/USD could establish a definitive macro bottom is now a popular topic of debate.
Traders and analysts agree that the first port of call for a significant decline is the 200-week simple moving average (SMA-200).
At $22,370 as of June 13, the SMA-200 has acted as key support throughout Bitcoin’s life, with only brief wicks below it marking generational spot price lows.
The SMA-200 has never broken its own uptrend, and the hope is that reaching it will give the bulls a breathing space.
“People are looking to buy there, it’s more than likely to rebound in that area,” plot Josh Rager in an update video posted earlier in the day.
Although he described the bounce off the 200 SMA as a “self-fulfilling prophecy”, thanks to the extent of interest in it, he cautioned that there was a guarantee that the BTC/USD pair would not drop further this time.
This is due to historical precedent, which shows that Bitcoin has bottomed out as much as 84% below its latest all-time high. With the current high of $69,000, that low would be $11,0000
“That would be detrimental. I don’t think the price will drop that low, I mean; you’re basically seeing a complete retracement of the entire bull market and we’ve never seen that,” Rager continued.
Instead, the areas of interest are the 2017 all-time high around $20,000, as well as the immediate bottom, which extends to $17,000. Also worth paying attention to is $14,000, which equates to an 80% retracement from current all-time highs, he added.
As we told you before, several of these levels have already been pointed out by others as potential price bottoms, among them by the trader and analyst Rekt Capital.
In a series of tweets on June 13, the importance of the SMA-200 came back into play.
Historically, #BTC tends to wick -14% to -28% below the 200-week M
A -14% wick this time around would translate to a ~$19000 $BTC
A -28% wick would mean BTC could reach as low as ~$15500 before reversing to the upside#crypto #bitcoin pic.twitter.com/j9tal7ZSt0
— Rekt Capital (@rektcapital) June 13, 2022
The Fed becomes the last chance for bulls
Meanwhile, at press time, the BTC/USD pair had managed to avoid a further drop in line with US equity markets.
The S&P 500, by contrast, lost 3% at the opening of the day, while the Nasdaq Composite Index lost 3.6%.
To stem the decline of cryptocurrencies, some claim that only the Federal Reserve can intervene, reversing monetary tightening as rising interest rates choke off growth.
“Realize how little this crypto market crash has to do with Celsius and stETH drama and everything to do with widespread panic in risk assets (stocks and cryptocurrencies alike) and broken charts” , said economist, trader and entrepreneur Alex Krueger to his Twitter followers on the day, leaving aside the Celsius news.
In another post you could read:
“This is just my opinion, sometimes I’m wrong. My estimate is that Celsius added 1.2 times to the fire. Everyone says it was Celsius. Watch the media tomorrow. But without Friday’s CPI figures and the crash of equities this would not have happened”.
However, illusions were few for long-time Bitcoin market participants. Should the BTC/USD pair drop below $20,000, it would be the first time the price has dropped below the all-time high of the previous halving cycle.
#fed FOMC starts tomorrow. Chances of 50 bps vs. 75 bps hike. pic.twitter.com/ftdQ9ZpmcL
— Ansel Lindner (@AnselLindner) June 13, 2022
“Without a pivot from the Fed, I expect this to be the first cycle where Bitcoin falls below the all-time high of previous cycles,” concluded Charles Edwards, CEO of asset manager Capriole.
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