He Forecasted Bitcoin’s Bottom Last Year; He is Now Claiming a Likely Decline to $6ks

News / 17.05.2020

Bitcoin has been trying to surge past its current psychological price level ($10k) such that the two attempts in the past week were unsuccessful. The second attempt encountered serious rejection, leading to a decline to price levels as low as $9.2k, a level which has been attained several times within some days.

Some investors have been heedful due to the lukewarm price action of Bitcoin and the possibility of additional downside movement, with a reference to its loss of the major $9.5k support.

In 2019, a trader known as ‘Dave the Wave’ forecasted Bitcoin’s correction to $6.4k price level at the time it incurred a well-established rally over $10k. About 6 months after his forecast, the price of Bitcoin incurred a correction which led to a bottom near $6.4k price level. The same trader is now suggesting the same forecast as Bitcoin is currently struggling close to $10k.

The trader shared a chart on Twitter in recent times pointing to the possibility of Bitcoin dropping to price levels around $6ks in the weeks ahead. The chart revealed a price action similar to three months ago when Bitcoin price was around $10.5k.

“BTC shorter term If the fractals continue to hold, time to start think about consolidation levels. 50% consolidation in real terms would put BTC in the 6K range. All good for going forward…”

The same trader had previously noted that the MACD (a key trend or momentum indicator) crossed negative, thereby suggesting bearish price action for Bitcoin. Based on history, such negative crossing comes before Bitcoin crashes, as it did the same a few weeks prior to the cryptocurrency’s crash from the $9ks to $3.7k.

Nevertheless, as Bitcoin is vulnerable to a decline, data has revealed a rapid decrease in the number of Bitcoin being held on exchanges. Hence, this should reduce the possibility of Bitcoin’s strong sell-off in the medium term. Jameson Lopp tweeted about it on May 12 as follows:

“The amount of BTC held by BitMEX and Bitfinex has reached new lows following the March 12th crash. Bitfinex now holds 93.8K BTC, down from 193.9k on March 13th. BitMEX’s BTC supply is now down to 216.0K BTC, down from a peak of 315.7K on March 13th. H/T”

As investors keep withdrawing Bitcoin from exchanges ensemble, it reduces Bitcoin’s market supply. If more people consistently demand Bitcoin, the reduction in supply should lead to rising equilibrium prices, thereby limiting a sell-off.

Source: Cryptopress.

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Sudarshan M is a long time crypto-enthusiast. Pulled in by bitcoin early on, it did not take long for Sudarshan to divert all of his academic attention from business studies to blockchain by doing his Masters and eventually pursuing his PhD in the subject.