A cryptocurrency strategist, recognized for his timely predictions on Bitcoin, believes there is still a possibility for BTC to remain bullish despite increasing bearish pressure.
In a recent strategy discussion, the pseudonymous trader Cheds informs his 49,800 YouTube followers that Bitcoin bears have taken control since BTC dropped below the vital support level of $90,000.
Cheds explains that Bitcoin bulls now need to protect the next support level to prevent a potential recurrence of the market crash witnessed in 2021.
“I maintain that we still experience momentum overhang from losing [$90,000] support, and it seems very likely that we will continue downward and reach $72,000. That’s my base case…
I believe it’s most probable we will touch the prior range. What we need to observe with Bitcoin is for it to hold the SMA (simple moving average) 50… This is crucial because it significantly influenced the peak in 2021 when the price began to fall below the [SMA] 50. We do not want to see that happen.”
In December 2021, Bitcoin dipped below the SMA50, resulting in a loss of approximately 66% of its value, plummeting from $48,000 to $16,000 within a year.
Regarding how Bitcoin might evade a similar downturn, Cheds states,
“This can be achieved with a strong wick… A substantial wick below the Bollinger Band followed by a recovery, such as an intraweek recovery, would be ideal, where we close back above the SMA50, touch and hold this prior level ($72,000), allowing us to continue the prevailing bullish trend…
So, the best-case scenario for me is a swift test and recovery, akin to a V-shaped recovery, an overreaction move. Something like what we experienced perhaps [in August 2024], where we dipped and then recovered, enabling us to test the prior range without falling below the MA50. That would be the best case in my perspective.”
A wick refers to a slender line that extends above or below a candlestick’s body. In the trader’s optimal scenario, a lower wick would indicate significant buying pressure.
As of now, Bitcoin is priced at $75,795, having dropped over 7% in the day.
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