Bitcoin Price Breaks Below 50-MA For The First Time This Cycle, Why A Crash To $38,000 Could Be Coming

According to crypto analyst Tony Severino, the Bitcoin worth has damaged under the 50-week Moving Average (MA) for the primary time within the present cycle, triggering renewed fears of a deeper decline. With worth momentum weakening and long-term development indicators flashing bearish warning alerts, the possibility of a price crash to $38,000 is changing into exhausting to disregard. 

50-MA Breakdown To Trigger $38,000 Bitcoin Price Crash

The Bitcoin worth motion took a decisive flip this week because the market slipped under the 50 MA for the primary time on this four-year cycle. Severino noted in his technical evaluation shared on X this Monday that the 50 MA has traditionally marked the start of prolonged downturns. He stated that following Bitcoin’s launch over 14 years in the past, each time it has closed under the 50 MA, a chronic bear market has adopted. 

Severino’s worth chart highlights BTC’s price performance from 2017 thus far. In the previous three Bitcoin bear markets, after the value fell under the 50-week MA, BTC continued to drop a further 61%, 59%, and 67%. On common, the cryptocurrency has misplaced 62% from the break level. 

Applying the 62% drawdown to this cycle’s 50 MA stage, the analyst predicts Bitcoin might quickly expertise a worth crash to $38,000. From the cryptocurrency’s present worth of above $87,000, this represents a staggering 60% decline. Additionally, it might suggest a roughly 70% decline from its all-time high of more than $126,000. 

Severino warns that merchants calling for a price bottom could also be ignoring how far Bitcoin has traditionally fallen as soon as this long-term development fails. He indicated that the 50-week MA has repeatedly served as a dividing line between bullish and bearish phases, and that worth slipping under it has extra typically led to prolonged intervals of weakness and capitulation.   

Bitcoin Momentum Indicator Falls To Historic Lows

A second evaluation presented by Severino focuses on Bitcoin’s every day LMACD, which is now close to ranges not seen in additional than 1,250 days. The oscillator has solely pushed under this stage six instances since BTC’s 2017 macro peak. These previous cases correspond to intervals of heavy draw back momentum the place the cryptocurrency had but to finish its bottoming process. 

Looking at Severino’s worth chart, the prolonged interval with out revisiting this decrease sure suggests Bitcoin could also be overdue for a momentum reset. The LMACD indicator’s present studying can be unusually weak traditionally, signaling that market momentum has not but reached excessive pessimism. 

The readings additional point out that, though BTC remains in a downtrend, worth corrections stay attainable earlier than a real backside is established. According to CoinMarketCap information, Bitcoin is buying and selling under $87,000 amid risky, uneven circumstances which have contributed to its 24% decline over the previous month.