According to crypto analyst Tony Severino, the Bitcoin price has fallen below the 50-week moving average (MA) for the first time in the current cycle, sparking renewed fears of a deeper decline. As price momentum weakens and long-term trend indicators provide bearish warning signals, the possibility of a price crash to $38,000 is becoming hard to ignore.
Breakdown of 50 MA causing a Bitcoin price crash of $38,000
Bitcoin price action took a decisive turn this week as the market fell below the 50 MA for the first time four-year cycle. Severino noted in his technical analysis he shared this Monday on X that the 50 MA historically marked the beginning of long-term recessions. He declared that next one The launch of Bitcoin more than fourteen years ago, every time the price closed below the 50 MA, a prolonged bear market followed.
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Severino Price Chart Highlights The price performance of BTC from 2017 to now. In the past three Bitcoin bear markets, after the price fell below the 50-week MA, BTC continued to fall another 61%, 59%, and 67%. On average, the cryptocurrency has lost 62% from the breakpoint.
Applying the 62% drop to this cycle’s 50 MA level, the analyst predicts that Bitcoin could soon experience a price crash to $38,000. Considering the cryptocurrency’s current price of over $87,000, this represents a staggering 60% drop. Moreover, this would represent a decrease of approximately 70% the all-time high is over $126,000.
Severino warns that traders are asking for one price floor may be ignoring how far Bitcoin has fallen historically once this long-term trend fails. He indicated that the 50-week MA has repeatedly served as a dividing line between bullish and bearish phases, and that price declines below it have more often led to longer periods of weakness and capitulation.
Bitcoin Momentum Indicator Drops to Historic Lows
A second analysis presented by Severino focuses on Bitcoin’s daily LMACD, which is now close to reaching levels not seen in more than 1,250 days. The oscillator has fallen below this level only six times since then BTC’s 2017 macro peak. These past examples correspond to periods of severe downward momentum when the cryptocurrency had yet to reach its peak bottoming out process.
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Looking at Severino’s price chart, the extended period without a revision of this lower bound suggests that Bitcoin may be too late for a momentum reset. The LMACD indicatorThe current analysis of the market is also unusually weak from a historical perspective, indicating that market momentum has not yet reached extreme pessimism.
The measurements further indicate that, although BTC remains in a downtrendprice corrections remain possible before a real bottom is reached. According to data from CoinMarketCap, Bitcoin is trading below $87,000 amid volatile, choppy conditions that have contributed to its 24% decline over the past month.
Featured image of Pngtree, chart from Tradingview.com