The co-founders of the crypto analytics company Glassnode believe that a Bitcoin (BTC) bottom may emerge after one of two things happens after the market downturn.
Glassnode co-founders Jan Happel and Yann Allemann, who share the Negentropic handle, narrate their 56,000 X followers that they are looking at two scenarios where Bitcoin could hit a local bottom.
According to Happel and Allemann, Bitcoin could either fall gradually to $25,000 or witness a serious liquidation event before bottoming out.
“Bitcoin risk signal at 100.
Two possible short-term scenarios:
1. Slowly decreasing to $24,800 – $25,000.
2. Fast, aggressive wick that gets bought up quickly. Anyway, we’ll hit rock bottom shortly after one plays out. We have seen these two scenarios play out in the past when the BTC risk signal has reached 100.
Looking at the analysts’ chart, it seems that BTC tends to witness a corrective move when the risk signal reaches 100.
Pseudonymous crypto strategist Rekt Capital also weighs in on BTC. According to the analyst, Bitcoin looks weak after that print a bearish double-top pattern.
“It took BTC 91 days to form the first half of the double top.
And only 63 days to form the second half of the double top.
What is the takeaway?
The first half fell in price step by step, respecting supports but finally breaking through (green box).
This recent crash didn’t care about support on the way down (orange box).
There wasn’t any response
Just shows how weak the buy side pressure is around the orange boxed area.
Buys are not ready or strong enough to properly intervene and change the course of price action.
And current volume levels suggest that seller pressure has not even reached its peak.”
Bitcoin is trading at $26,028 at the time of writing, down 2.3% in the past 24 hours.
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Image generated: Midway through the journey