A crypto trader who accurately called the May 2021 collapse for Bitcoin has revealed his worst-case scenario for BTC now that it’s dropped roughly 50% from its all-time high for the second time in a year.
The pseudonymous analyst known as Dave the Wave tells his 90,000 Twitter followers that Bitcoin has lost a crucial support level at $40,000 and faces more downside risk.
According to the analyst, Bitcoin will likely hit support at $30,000 but is also vulnerable to dropping as far as $25,000 in a more bearish scenario.
“Ouch. The problem is once it loses that $40,000 area, there’s not much support below…
But support there is.
Best case [continued correction] scenario – $30,000
Worst case scenario – $25,000
Dave the Wave uses Fibonacci extensions, plus identifies a possible bearish head and shoulders pattern to gauge a downside target of $25,000 for BTC.
“For those wondering about the fib extension here, it’s measuring a potential head and shoulders.”
The closely followed crypto trader says that for Bitcoin to generate bullish momentum, the flagship crypto asset would first have to convincingly cross above a descending resistance, currently at about $41,000.
“Keep it simple people.
A lower level again and lines of resistance that price would have to cross before even thinking of a trend reversal.”
At time of writing, Bitcoin is trading at $35,201, almost 50% down from its all-time high above $69,000.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Michael Warwick