Bitcoin has seen a remarkable recovery trend that has seen its price once again exceed $22,000. That’s a welcome development for the digital asset, which has suffered from multiple slumps, but it’s not all rosy for the cryptocurrency. As the market continues to remain in a bearish trend, there are levels that Bitcoin needs to hold higher in order to maintain such high prices. Otherwise, it faces a decline of more than 85% from its all-time high.
Bitcoin needs to hold above $17,000
Many prominent figures in the financial industry have shared their thoughts on where they think the price of Bitcoin is headed. One of them is Clem Chambers, CEO of ADVFN. Chambers, who is also widely known as a financial analyst, said that for the digital asset to continue to grow, it must ensure that it does not fall below $17,000.
IN Conversation conducted by Daniela Cambone for Stanberry Research, the financial analyst explained that Bitcoin is likely to reach $40,000 if it maintains strong momentum. However, there is still a good chance that the price will reach the dreaded $10,000 if it fails to hold the $17,000-$18,000 level.
Interestingly, even though the price of Bitcoin is currently rising, Chambers believes that a bearish scenario is more likely in this case. This means that the analyst expects the price to fall below $17,000 and reach as high as $10,000.
BTC price drops below $21,000 | Source: BTCUSD on TradingView.com
Chambers’ outlook is consistent with what has been seen in the cryptocurrency market in the past. Assets tend to lose about 80-85% of their prices and in extreme cases even more. This historical trend actually puts the price of Bitcoin closer to $10,000 than the bottom.
But what does BTC say?
Most of the pump in the crypto market lately has come from the impending Ethereum merger. The chain took the rest of the market with it by generating a surge of interest in the space. However, since others like Bitcoin only go to the highest level of Ethereum possible, it is not supported as much.
A relief rally like the one the market is currently experiencing has always resulted in profit taking, which adds to the selling pressure in the market. Glassnode points this out in their report, noting that there is profit-taking at the current level, much like it was in June, bringing the loss dominant mode to a low of 0.58, putting it firmly in bearish territory.
With that in mind, Chambers’ prediction for Bitcoin more likely to fall below $17,000 rather than recover to $40,000 comes into clearer view. However, the profit margins of BTC holders continued to grow during this time it created a stronger hold among investors.
Accumulation quickly followed, although not as strong as needed to push the price above $30,000. The number of new BTC addresses has seen a significant increase, as has the holding of old BTC addresses, indicating the aforementioned accumulation trend.
Featured image from Coinpedia, chart from TradingView.com
Follow Best Owie on Twitter for market stats, updates and the occasional witty tweet…