- Bitcoin price could still drop to the 200-MA at $22,000 with possible wicks down to $19,000 and then $15,500.
- Bounces from these levels have provided huge investment returns for long-term investors, says crypto analyst Rekt Capital.
Bitcoin (BTC) posts fresh losses below $30,000, with the broader crypto market teetering in the red amid fresh downside for stocks. BTC, which is down almost 58% from its all-time high, may see further selling to set fresh multi-year lows.
But for investors looking to get into the market, it could present a tremendous opportunity if prices land at a key historical support level.
Top crypto analyst Rekt Capital says this has been the case whenever BTC price breaks below or below the 200-week moving average (the 200-MA).
Historically, #BTC tends to end at or below the 200-MA (orange).
The 200-MA therefore tends to offer oversized ROI opportunities for $BTC investors (green)
Wicks below are the point of highest opportunity
So how much is BTC sucking below the 200-MA?
One thread #Crypto #Bitcoin pic.twitter.com/b3TLfsafUe
— Rekt Capital (@rektcapital) May 24, 2022
“Since 2015, the 200-MA has been touched four times to form cross-generational bear market bottoms. And 3 out of 4 of those bear market bottoms ended up wicking down,” Rekt noted in a Twitter thread on Tuesday.
Down wicks ranged from -14% to -28%, with the latter occurring after the market collapse in March 2020. According to the analyst, Bitcoin’s current price means that bears need to drag down the value of the flagship cryptocurrency by 28% to reach the 200-MA, which is currently around $22,000.
Below this historical support level, a -14% to -28% return would take BTC/USD to $19,000 and $15,500.
This means that investors who likely missed the last bull market could have a chance for a low entry point at these levels.
However, while the analyst says that the 200-MA’s down wicks have largely represented periods of “highest financial opportunity for long-term BTC investors,” the market at these times is usually characterized by extreme fear and maximum pessimism.
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