May 25, 2021 / Analytics

Bitcoin Price Analysis: How To Trade Bitcoin In A Bear Market?

bitcoin analysis forecast

Bitcoin (BTC) cryptocurrency rate corrected after a powerful dump and consolidated above the $ 38,000 mark. However, BTC/USD may drop in price to $ 31,000 by June 1 as a result of the next downward impulse.

Key Points

  • BTC price is trading above the 100-hour moving average ($ 37,190).
  • A bullish trend line with support around $ 38,000 has formed on the hourly chart.
  • Bitcoin value will start to fall if sellers break through the $ 37,500 barrier.

On May 21, the BTC rate began to dump again. By Sunday, the asset fell by 25% – from $ 41,800 to $ 31,115 (Bitstamp data). On Monday, there was a reversal in the market, because the cryptocurrency was in the oversold zone. Bitcoin began to actively buy, and the coin went up in price by almost 29%.

btc chart

Now the coin rate is hovering close to 23.6% Fib recorded during the dump from $ 64,900 to $ 30,069. If this barrier holds, then the value of BTC should increase to $ 43,000. Otherwise, a downward movement towards $ 31,000 will appear. according to the EMA Ribbon indicator, BTC may rise in price up to $ 40,500.

btc chart

How To Trade Bitcoin In A Bear Market?

BTC has dropped 54% from its all-time high on April 14, so there should be no doubt that the bull run is over. In order to develop a trading strategy for the next 11 months, it is worth drawing an analogy with the dynamics of changes in the rate of an asset in 2018. Three years ago, the value of BTC collapsed by 85% in almost 12 months. In this regard, by April 2022, the coin may fall in price to $ 10,000.

The Fibonacci correction, taking into account the dump from $ 64,900 to $ 10,000, indicates that the Bitcoin rate bounced from the 38.2% level ($ 31,000) and exceeded the 50% level ($ 37,500). Thus, the value of the coin could rise to $ 43,800 before the next round of the bearish trend. However, in 2018, the BTC rate did not reach 61.8% after falling to 38.2%. Therefore, betting on the Bitcoin price rise to $ 43,800 carries a high risk.

Optimal tactics for the medium term include two points:

  • buying BTC for $ 23,000 (23.6% Fib);
  • sale of cryptocurrency for $ 37,000 (50% Fib).

btc chart

The development of this scenario of the development of events should take 22 days. If successful, the profit will reach 61%.

Technical indicators:

  • 4 hours MACD is in the bullish trend zone.
  • 4 hours RSI is above 50 (in the neutral zone).
  • Major Support Level – $ 31,000.
  • Major Resistance Level – $ 43,400.
  • The nearest pivot points are $ 37,140 and $ 43,474.
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