With only a 30% pullback on the books, it is hard to consider the most recent consolidation phase in Bitcoin much of a correction. But whatever base is currently being built within this range, could act as the next bear market botton after the leading cryptocurrency by market cap tops out and the cycle restarts over again.
Here’s why the zone is a likely target for the next major downtrend when it eventually arrives.
When Bitcoin Eventually Tops, Where Will It Drop To?
Bear markets are when foundations are built and only the strongest survive. The fruits of the last bear market are only now coming to light, and anyone who was lucky enough to snipe the exact bottom has the largest ROI to show for their efforts.
Related Reading | Running Bitcoin: Passing The Torch From Hal Finney To Jack Dorsey
Finding a bottom isn’t easy, but because Bitcoin is cyclical with some degree there’s a chance things can be predicted. Using a key zone from the last bull market that ultimately acted as the 2018 bear market bottom, a theory on where the next downtrend might stop can be gleaned.
Finding The Next Bear Market Bottom With Fib Extensions
Using Fibonacci retracement and extension tools, measuring the 2013 peak to the 2014 bottom, Bitcoin eventually hit a snag in the 2017 uptrend around the 2.618 level.
Fibonacci extensions act as potential points of support and resistance when none otherwise exist. With the former all-time high cleared, Bitcoin is back in price discovery mode, and the only potential threats come from Fib extensions, negative news, or rounded numbers like $20,000.
Could this be the next bear market bottom in 2023? | Source: BTCUSD on TradingView.com
Fib extensions, like rounded numbers, act as more of a phycological resistance level. The human brain seeks the easiest path,…