Bitcoin on August 22, 2022 – Ready for another plunge?

The realism of $16,000 – The price of Bitcoin (BTC) starts the week with signs of weakness. Last week’s fleeting euphoria of $25,000 already seems a long way off.

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Bitcoin price forays into the $20,000-$21,000 zone

The bears will therefore have succeeded in bringing the most optimistic back to reason. The bear market is not over, the beginning of a lasting upward recovery, marking the thaw on the markets is not yet on the agenda.

Bitcoin price falls up to around $20,910 on Bitfinex today, August 22, 2022. The cryptocurrency is trading at $21,069 at the time of writing. Its price is currently recording a daily loss of 2.09%.

BTC price floor: the scenario of a fall to $16,650

The current context brings back to the table the questions related at the bottom for this cycle. Has Bitcoin bottomed out, or is another drop below $18,000 inevitable?

Bitcoin lost its bullish support at the 200 week moving average. While its price was at $21,135, trader Rekt Capital pointed out that the price of the cryptocurrency “ is down -8% below this average.

However, Bitcoin has historically “tended to fall from -14% to -28%”, below the latter. Bitcoin had already registered a 21% drop below the 200-week moving average in mid-June.

Based on this data and the current value of this average, a 28% drop below this essential bullish support would theoretically bring back Bitcoin up to $16,650which could then constitute the Bottom of this cycle.

A 21% drop below the 200-week moving average as in mid-June would then mark an eventual price floor around $18,270.

Too early for a bottom, a drop below $20,000 remains more likely

Rekt Capital also indicates that, referring to data from 2015 and 2018, Bitcoin should bottom between 517 and 547 days before the next halving, which should take place in April 2024.

If the bulls and bears followed this schedule, then the floor price of this cycle should be reached in the fourth quarter of this year.

In the meantime, further declines remain more likely than bullish impulses, which would take Bitcoin price back to levels near $25,000.

Rekt Capital shared a chart which shows that the level that acted as support for the monthly RSI for both 2015 and 2018, is turning into resistancesuggesting further declines.

RSI Relative Strength Index Shows Selling Pressure on Bitcoin
New resistance for the RSI? Source: RektCapital Twitter

The truce is well and truly over, so markets should prepare for a return below $20,000. The red candlesticks after the incursion above $25,000 could materialize the bearish scenarios that were pointing to $16,000.

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