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Bitcoin could drop to $ 5,000 before the bull run of the halving, analyst Jacob Canfield fears

Bitcoin could drop to $ 5,000 before the bull run of the halving, analyst Jacob Canfield fears

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Bitcoin (BTC) plays a game of averages, once again drawing attention to significant levels of support. An outbreak is expected, but the direction remains uncertain.

Bitcoin is on the threshold of a significant price movement

Bitcoin prices have already passed thresholds like this in recent months. The price fluctuated in the thin range between bullish and bearish, whereby there have always been malicious movements. Now it’s about the $ 10,000 trek, with thinner options.

Bitcoin analyst Jacob Canfield sees another decision time for the leading coin. He bases his analysis on a recent rejection of the 200-day average, which allows a crash and a recovery later in the year.

The recent price movement looks ambiguous, with Canfield suggesting two main scenarios. One of the ways is a correction similar to that of July 2018, where bitcoin prices fell more than 60%. The other possibility is another rally in the middle range, as was observed for the upswing after February 2018.

According to Canfield, the new direction for Bitcoin could not be reached until the coin leveled off over $ 8,600. Now the $ 8,400 support is being viewed with caution as Bitcoin remains very volatile. 

The Bitcoin price is traded at a relatively high volume of $ 25 billion a day at $ 8,630. From this position, the market is active enough, with liquidity being promoted by both the bearish and bullish participants.

“That means it is possible that we will see a decline before halving. Both previously had a 28% decline. ”

Canfield warns that it is still best to manage risk and optimize BTC trades day by day. It is also possible that the analysis will be rejected and Bitcoin will take a different direction. The analyst admits that rallying over $ 10,000 and closing at that price would invalidate the scenario. But from the current level, it’s possible that Bitcoin will actually be corrected before halving in May.

“For this analysis to be wrong, I would need to see a daily close above $ 200MA and $ 10,000 to reach a higher high and invalidate the overall structure.”

But the more likely scenario would make 2020 resemble 2018. Given the similarities in the charts, Canfield believes Bitcoin will see a steep correction – followed by another rally in the spring. 

The sale has not yet taken place, and it is possible that BTC will remain in range for a while. However, if the 2018 model repeats itself, Bitcoin will drop to $ 6,400 and possibly even $ 5,000.

“We haven’t seen the surrender volume sell out as before, and we’ve made one lower high after another from the 13.8k mark. It is possible that we will be in a range for the next few months and continue to lower lower levels until we reach a level of $ 6400 to $ 5000. ”

Bulls have to defend support levels

The new bull and bear fight comes after last Sunday’s flash crash, in which the direct sale of whales plummeted the price of over $ 9,000. Now the bulls have another point of defense for BTC.

Bitcoin has so far avoided the January slump and has had the best start to the year since 2012. The volatility index is currently between 3 and 4%, with significant daily fluctuations. The Bitcoin mood remains neutral at 48 points – a level from which a shift in both directions is possible again.

But for now, Bitcoin predictions remain within the $ 8,000 to $ 10,000 range , with further price movements only mentioned as less likely future performance and price records.

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