With the recent correction, the price of Bitcoin (BTC) fell back to the $20,000 level. And, according to the trader known as Capo, this is not the last price support for the cryptocurrency.
The popular trader, who predicted the current price correction, said that BTC is likely to fall back and lose the $20,000 support. If that happens, the market should see another wave of panic and selling.
This way, in case BTC takes another dip, the next support level will be between $18,000 and $16,000.
Stability and false alarm
As Capo explained to his 375,000 followers on TwitterBTC could fall below $20,000 and trigger a massive panic.
“If BTC goes above the $20,000 level, the panic could be huge. Many people have stops below this level. Others believe it cannot fall below the all-time high of 2017, as it has never happened before. It could easily reach $16,000 or $18,000 if it drops below $20,000,” he explains.
The reference to 2017 is that during a halving cycle, BTC never fell below the high of the previous cycle. In the case of 2017, the high of BTC was around $19,600. This level would therefore be a kind of “natural support” for the price.
The problem is that there have only been two full BTC halving cycles so far, one starting in 2012 and the other in 2016. Currently, the cryptocurrency is in its third cycle, which began in 2020.
Due to the weak history of the halvings, there is no guarantee that the $20,000 region is indeed support.
At the time of writing, one BTC is worth around $20,600. That is, around $1,000 above the high of the last halving cycle.
“I’m still out of the market,” says the trader
According to Capo, BTC has not yet bottomed out. The price fell to a low of $20,111, the lowest since December 2020.
BTC, as well as cryptocurrencies in general, are suffering from global pessimism regarding the economy. In addition, several companies in cryptocurrencies limited or blocked withdrawals, raising fears in the market.
At the same time, institutional investors and funds suffer from a lack of liquidity and reduced leverage. And this widespread fear could trigger further market declines
“See fundraising appeals here. Honestly, this is one of the clearest fake bombs we’ve seen so far. In my opinion, the $20,000 level will not hold for long. We haven’t seen a proper bottom yet and there are no signs of upside. I’m still out of the market,” Capo said.
The trader has an accurate forecast history. When Bitcoin was worth around $40,000, Capo predicted that if the price fell below $30,000, he would look for regions between $21,000 and $23,000. Something that actually happened.