Bitcoin (BTC) could be on a return to levels not seen since before its 2020 bull market if history repeats itself.
That was according to new analysis published on May 24, which studied Bitcoin’s interaction with its 200-week moving average (WMA).
Bitcoin Bottom Target Could Be Between $15,500 and $19,000
In a twitter thread, the popular trader and analyst Rekt Capital explained how BTC/USD might behave should it drop to retest the 200WMA.
A lifeline throughout the history of Bitcoin, the 200WMA is an ever-increasing last support line that has never been broken for good.
Currently hovering around $22,000, according to data from Cointelegraph Markets Pro and TradingView, the level continues to act as a line in the sand when it comes to bear markets.
In the past, Rekt Capital notes, Bitcoin has “wicked” below the 200WMA – briefly capitulating before rising back above, which allowed it to hold as support and not become resistance.
Those wicks, however, have implicated as much as 28% of the spot price, meaning that if a similar wick were to occur now, Bitcoin would end up at $15,500.
“BTC tends to make -14% to -28% wicks below the 200-MA. And as the 200-MA of BTC now represents the ~$22,000 price point… A -14% bearish wick below the 200-MA would result in a ~$19,000 Bitcoin,” Rekt Capital wrote.
“And if BTC were to repeat the depth of the March 2020 bearish wick below the 200-MA USD/BTC it would revisit the ~$15,500 price point.”
“Pay attention” under $23,000
As Cointelegraph reported, much has been made of Bitcoin price action today compared to March 2020 at the height of the COVID-19 cross-market crash.
Rekt Capital additionally examined all-time drops from all-time highs and Bitcoin “death crosses” this month, producing a BTC price target of $22,700 – almost exactly at the current 200WM.
“BTC is slowly approaching the 200-MA Historically, the 200-MA tends to offer fantastic opportunities with outsized ROI for long-term BTC investors (green circles)”, added alongside a graph showing the interactions.
“Should BTC do indeed reach the 200-MA support… It would be wise to pay attention.”
Analyst PlanB, creator of BTC’s stock-to-flow pricing models, has also long advocated for the 200WMA’s role as support.
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