The Bitcoin price has seen a significant decrease of more than -22% since the mid-March high of over $73,000. While the current price of BTC is hovering around $57,000 after the recent crash, there is speculation that there could be further downside ahead if history repeats itself. Jacob Canfield, a trading mentor at Trading Mastery, has conducted an analysis that suggests a potential decline in the Bitcoin price, possibly reaching lows not seen since the beginning of the year.
Canfield’s analysis is based on historical patterns observed in Bitcoin’s pricing trends. According to him, Bitcoin tends to retest the yearly open levels, which can either confirm bearish or bullish trends but are a consistent feature in Bitcoin’s market behavior. Since 2017, each year’s opening price has been retested within the year, with the exceptions of 2023 and 2024.
Canfield noted that the bearish retest of the 2018 opening BTC price occurred just before the COVID-19 pandemic crash, and similar patterns were observed in subsequent years. The 2019 yearly open at $3,850 was retested during the 2020 Covid Crash, and the 2020 and 2021 opening prices were also retested, leading to significant market movements.
Looking ahead, Canfield speculates about the potential bottom for Bitcoin in the coming months. He points to several technical indicators that he considers pivotal in determining the future movement of BTC. The 0.618 Fibonacci retracement level aligns closely with the projected yearly open for 2024, suggesting a support level in the range of $38,000 to $42,000.
Another crucial indicator is the weekly 200 EMA/MA Ribbon, which is converging around the 2024 opening price as well. This reinforces the potential for this level to act as a strong support zone. Canfield speculates that the 2023 yearly open at $16,500 may not be retested if a bottom is formed around the 2024 yearly open.
Despite the bearish outlook, Canfield’s analysis acknowledges the cyclical nature of Bitcoin’s market dynamics and the importance of historical precedents in forecasting future trends. He emphasizes that there are various scenarios that could play out, and that historical patterns provide valuable insights for traders and analysts.
Canfield believes that the analysis gives a high likelihood target for where a local bottom may be found, based on historical precedence. He encourages further discussion and analysis from the community to gain a more comprehensive understanding of the potential future movements of Bitcoin in the market. As of the time of this writing, BTC is trading at $57,479.
In conclusion, the analysis conducted by Jacob Canfield provides valuable insights into the potential bottom for Bitcoin based on historical retests and trends. While there is a bearish outlook, Canfield’s analysis highlights the importance of considering historical patterns and technical indicators in forecasting future trends in the volatile cryptocurrency market. Traders and analysts can use this information to make informed decisions and prepare for possible market movements in the coming months.