In his last Video Published on December 21, cryptocurrency analyst Rekt Capital attempted to answer the question, What is the worst case scenario for Bitcoin right now? After hitting an all-time high of $108,374 on December 17, Bitcoin price has fallen more than -11%.
How low can the price of Bitcoin go?
Rekt Capital placed Bitcoin Price retreat In a historical perspective, emphasizing the historical significance of weeks 6, 7 and 8 in the “price discovery bullish trend”. Citing past cycles such as 2013, 2016-2017 and 2021, he explained that Bitcoin tends to correct strongly in these specific windows, with some drops reaching 34% or even more.
“Understanding these weeks is critical because they are problematic for Bitcoin,” said Rekt Capital, referring to past cycles where significant downturns occurred during this time frame. For example, in week 7 of the 2013 cycle, Bitcoin experienced an impressive 75% pullback over 13 weeks. Similarly, the 2016-2017 period saw a 34% drop in Week 8, indicating a recurring vulnerability in these particular weeks.
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From the current cycle, Bitcoin has undergone a +10% correction that has taken the price to the historical critical support zone at $96,537 on the weekly chart. Rekt Capital emphasized the importance of this level of support, noting, “This area of historical support has enabled a move to $108,000.” Failure to hold this support could trigger a sharper correction to $89,830, he warned.
Looking at price action over the past few days, Rekt Capital noted the emergence of a bearish candle on the weekly time frame – a technical indicator often associated with potential reversals. “We are losing resistance that has turned into support,” he observed. This loss indicates a potential transition into a corrective period as the price struggles to maintain its uptrend.
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Rect Capital also noted in its analysis the importance of maintaining the 5-week technical line. “If we lose this 5-week technical uptrend and the orange trend line, there is growing evidence that we may be entering a correction period,” he warned.
In addition, he addressed CME gap Between the $78,000 and $80,000 price levels, a critical area that is yet to be filled. “Exploring 26%, 27%, 28% declines could fill the entire CME gap,” noted Rekt Capital.
Historically, CME gaps tend to be filled while there are a few that have never been filled.
He explained that despite all the cautionary signals, Rekt Capital remains bullish on the long-term: “These pullbacks are what make future uptrends possible in the parabolic phase of the cycle.” Using previous cycles, he showed how reforms have historically provided much-needed “breath” to the market.
For example, in the 2021 cycle, Bitcoin experienced a 16% retracement in week 6 and an 8% drop in week 8, but the overall uptrend continued. Similarly, the current 10 percent correction, though significant, could serve as a preliminary step for the country. The next step is price discovery.
At the time of publication, BTC was trading at $95,000.
Featured image created with DALL.E, chart from TradingView.com
