With the price of bitcoin (BTC) fluctuating this Friday, June 24, above USD 20,000, many of the comments about its possible evolution refer to the floor of the price of this cryptocurrency. Has bitcoin bottomed out and is it gearing up for a bull run? Or on the contrary, can the price of bitcoin go even lower?
In the context of the current bitcoin price correction, the month of June shows the worst performance in the pioneering cryptocurrency market so far this year. With a week to go, June already exhibits a negative return of 34.3%, the biggest monthly decline since November 2018. In January, April and May, monthly losses did not exceed 18%.
CriptoNoticias spoke with the trader and analyst Eduardo Gavotti about the current evolution of the bitcoin market, who presents a bearish outlook for this cryptocurrency in the coming months.
I think bitcoin could go even lower, despite the significant drop it has already had. I estimate that there has not yet been a change in the environment that will restore risk appetite to investors and speculators.
Eduardo Gavotti, bitcoin trader.
Gavotti had already raised this hypothesis before, when he stated that the global context of risk-off was putting downward pressure on an asset like bitcoin, as we reported in this medium. In other words, in times of economic uncertainty, investors tend to move away from risky assets, as is currently the case.
In the following graph, an analysis of the price of bitcoin is presented, which includes the last three cycles, including the present one, in which the floor price has not yet been determined. The so-called Fibonacci retracement levels are used in each cycle, which determine the possible percentages of price fall once the maximum is reached.
On the other hand, in the lower panel, the RSI indicator, or relative strength index, is in a strong downward trend. This indicates that price movements are negative compared to the last twelve months. Historically, a low of the RSI is usually in the area of the end of a cycle that precedes the next bull run, although this low has not yet occurred.
“All scenarios are possible, but I wouldn’t be surprised if BTC hits $12,000 levels and consolidates for a while in a fairly low range before the next bull run,” says Gavotti. The possible range of consolidation of the bitcoin price would be between USD 11,000 and USD 16,500.
“There is a possibility that, after finding a minimum in this bear market, the price will consolidate, that is, park or enter a range, between 6 to 12 months before starting a next bull run,” says Gavotti. There have been no changes in the environment, he points out, for risk appetite to return. “Of course, I could be wrong, but I don’t think we’ve hit the bottom yet,” says the trader and analyst.
At the time of writing this article, the price of bitcoin is 21,096, according to the CriptoNoticias price index. This represents a decline in the price of 55.8% compared to the beginning of the year and 69.2% compared to its historical maximum reached in November 2021.