Why a 30% Bitcoin price crash should not catch you off-guard right now

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The Bitcoin (BTC) price rally halted the moment Joe Biden was announced as the projected winner of the 2020 presidential election during the weekend with price dropping from $15,500 to $14,400.

However, Bitcoin is still continuously showing strength as it’s once again facing the final resistance zone at $16,000.

This final resistance zone is the last major hurdle before a potential run at a new all-time high. However, a pullback is becoming increasingly likely with the Fear & Greed Index currently at the same levels similar to the peak high in the summer of 2019.

The weekly level at $16K likely big resistance

BTC/USD 1-week chart. Source: TradingView

The Bitcoin’s weekly chart shows the resistance zone at $16,000 as the final resistance zone before a new all-time high can be tested.

The weekly chart also shows support levels if the price of Bitcoin starts to correct. A correction would be relatively healthy is it flips previous resistance levels to become new support.

If a correction occurs, the weekly level of around $11,600-12,000 should be watched as a potential support zone. Such a correction would mean a dropdown of approximately 30% for Bitcoin’s price. A correction of 30% is quite normal as this happened a few times during the previous bull cycle in 2017.

‘Extreme greed’ similar to summer 2019

The Crypto Fear & Greed Index is a useful indicator to measure the current market sentiment. In extremely depressed periods, the index uses the color red to mark the overall sentiment.