Journalist
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In a discussion dating back to November 14, a crypto analyst pointed out that Bitcoin was defending the 50-week moving average but could potentially move lower.
This breakdown could take it to the 100-week MA, and the depths of the bear market could even take it to the 200-week MA.
Source: BTC/USDT on TradingView
The prediction of the 50 and 100 week moving average has come true. In recent weeks, the 100-week moving average has been defended as support.
At the time of writing, it stood at $85.5,000, which is well in line with last month’s demand range of $84,000-$85,000.
Beimnet Abebe of Galaxy Trading was the analyst who created this prediction. He also said he would “love to buy Bitcoin.” [BTC] at prices under $80,000.
Will crypto and Bitcoin suffer more – and not just in terms of price?
In one message on Xuser InvestingLuc shared a (possibly apocryphal) story explaining why “crypto isn’t cool anymore.” The real question is, he wrote,
“Does the crypto utility generate enough demand in the real world to offset a continued decline in retail participation?”
Social media engagement for crypto dropped. Institutional interest in Bitcoin is positive for adoption, but we may be straying from the decentralized, permissionless ethos of early BTC adopters.
It could lose part of its identity that captured our attention years ago.
Bitcoin’s reduced volatility
Speaking about the CNBC Squawk BoxProfessional Capital Management founder Anthony Pompliano noted that Bitcoin volatility has likely halved compared to previous years.
The spot BTC ETF flows have been mostly negative since the 10/10 crash.
Still, the 70%-80% decline that has come to define the bear markets of previous cycles might not happen this time, because of institutional investors. From $126,000 to $84,000, BTC withdrawal was a more modest 33.3%.
This retracement came at a time when stock markets such as the S&P 500 and Nasdaq, as well as precious metals, are near or at record highs.
It can be argued that the drop in volatility, which prevents huge declines, also limits the potential for bubble-like rallies.
Analyst Axel Adler Jr The actual MVRV metric on CryptoQuant rose to just 2.17 in 2024. It was unable to scale 2 even after hitting record highs this year.
This can be partly explained by the way ETF flows do not affect on-chain metrics.
At the same time, the greater participation of smart money, and the fact that Bitcoin is a maturing market, has meant that volatility is less than in previous cycles, and holders are more willing to take profits and exit the market.
Final thoughts
- An analyst’s prediction of a price drop towards $80,000 has come true, and the next prediction is that prices below $80,000 are a good buy.
- The crypto market likely entered a bearish phase. There has been little demand in recent weeks after the 10/10 crash.