Bitcoin, as well as the entire cryptocurrency market that stubbornly follows it, is in the midst of a gruelling bear market, with four clear lower highs since the $14,000 top in June.
The world’s largest cryptocurrency is now 50% down from its tremendous peak six months ago, with several altcoins seeing price drops of more than 70%.
The potentially devastating bear market, which was exemplified by the recent moving average death cross, could well see Bitcoin fall by a further 70%, with price targets emerging at $3,150 and $1,850.
The previous two death crosses took place during the 2014 and 2018 bear markets, with Bitcoin proceeding to fall by more than 60% on both occasions.
The only way Bitcoin can nullify the threat of an impending bear market is if it can rally above $8,850 and gain a level of support in that region before any potential move to the downside.
Bitcoin’s first hurdle is the 22 EMA on the daily chart, which has suppressed price action for the past month by becoming a bitter point of resistance.
The next level to the upside is $7,900 as it is in confluence with the 50 EMA on the daily chart. This level also provided some support for Bitcoin between the end of September and end of October.
However, the most likely scenario is a drop in price to $6,750 before a potential test of the historical level of support at $5,900, which was a key level during 2018’s crippling bear market.
If that level fails to hold, then Bitcoin will almost certainly enter a phase of capitulation, with bullish traders left questioning whether the asset even has the potential to reverse into a bull market.
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