At the time of this publication, Bitcoin is struggling for a bull run trading at $29,346 after the price dropped by 3.20% in the last 24hrs. Bitcoin has subsequently corrected 3% since the drop. Recently Bitcoin had reached the $28,000 range, then climbed towards $30,000 before retracing back around the $29,000 mark.
Bitcoin To See Another Price Correction
As the flagship currency tries to find stability, there is a possibility for Bitcoin to witness another huge price drop, and if history repeats itself, it could go as low as $15,000 or even lower. The author of the Rekt Capital Newsletter provides a thorough case study of previous bitcoin death cross cycles and the subsequent Bitcoin corrections.
So what exactly does death cross mean? Well, on a technical chart, a Death Cross happens when the 50 EMA crosses UNDER the 200 EMA. Bitcoin has gone through multiple death cross cycles in the last decade, each in a different year.
Further, the author goes on to suggest that, in the past, Bitcoin experienced an even greater correction following the death of the cross. For example, after the death cross in 2013, Bitcoin corrected 70%, after the death cross in 2017, it corrected 65%, and after the death cross in 2019, it corrected 55%.
Nevertheless, following the death cross in 2020 and 2021, the Bitcoin price witnessed a significant increase. In both cases, the death cross happened at the bottom.
BTC is more likely to follow the trajectory of 2013, 2017, and 2019 this year, according to a Rekt Capital analyst. This is because, instead of reversing the trend, Bitcoin has already corrected by more than 36% since January 2022.
Also, before hitting the death cross, Bitcoin had corrected 43% from its November 2021 top. Hence, if a similar 43% retracement follows the death cross, then it would mean that the BTC price might hit $22,700.
Here is how the death cross is expected to affect the Bitcoin price
- Bitcoin might bottom at $18,000 if the death cross in January 2022 is corrected by 5%.
- The BTC price will drop at $13,800 if there is a correction of 65%
- Bitcoin would reach a low of $11,500 in a 71 percent fall. Since its November 2021 peak, the BTC price would have been corrected by more than 80%.
“What’s fascinating about the scenario of a -43% post-Death Cross fall, however, is that it would result in a $22,000,” says Rekt Capital.
According to the expert, it would provide wonderful purchasing chances for BTC investors with a significant return on investment.