Bitcoin appears to be looking at a little more downside before it becomes a reasonable buy again, according to a pair of crypto industry commentators. Having recently rebounded from what most traders are considering the ultimate bottom of the 2018 bear market, we could be looking at a further drop then sideways trading for a while.

Such price action has been seen in the Bitcoin market numerous times before. If similar happens again, the sideways action will eventually result in a breakout to the upside.

A Bigger Drop for Bitcoin?

Referencing the work of Civic (CVC) founder and CEO, Vinny Lingham, Nunya Bizniz (@Pladizow) has identified a price of around two times the widely agreed upon December low as a conservative buying opportunity. Based on previous market cycles, a period of consolidation, that might last months, will follow a further drop from current levels:

The above chart references three other periods of such consolidation. The first is at the end of 2012 to mid-2013. Then a shorter period during the epic run up in price of 2013. Finally, the period just before the 2016-2017 bull run. Lingham has commented on the importance of the market consolidating after dramatic moves such as those witnessed since mid-2017 in previous works.

On each of these occasions, Bitcoin reached an ultimate bottom, returned to prices of around two times greater than that bottom, before trading sideways for a period of weeks to months.

Currently, the price of Bitcoin is around $8,000. For it to reach the “conservative opportunity to buy”, it will need to drop a little further. The ultimate December low on the chart used by Nunya Bizniz is actually $3,148. For Bitcoin to follow the above patterns, it would need to drop about another $1,700.

According to the trends observed by the Twitter-based market commentator, the price will then enter a period of consolidation. Such periods, according to Lingham, are crucial to avoid repeats of the kinds of bubbles seen previously. Prior to the mid-2017, extreme run up, he wrote:

“Bitcoin has spent the better part of 3 years recovering from a pretty damaging boom/bust cycle… Yes, Bitcoin is both scarce & valuable, which will lead to the price continuing to increase over time, but if that happens too quickly, we will enter another boom/bust cycle — which is really not an ideal situation if we want Bitcoin to move from a commodity to a store of value.”

 

Related Reading: If In Doubt Zoom Out, Bitcoin Profitable Days Still at 91.5%

Featured Image from Shutterstock.





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More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts
More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts
More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts
More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts

More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts

More Downside In Bitcoin Before Conservative Buying Opportunity, Say Analysts