Bearish opinions about Bitcoin have been taking the market for some time. But these opinions have a lot of credibility due to historically important indicators that seem pessimistic. Benjamin Cowen highlighted how these indicators could play an important role for Bitcoin to potentially hit 100,000 and eventually start a bull run. Here is a breakdown of the important levels for these indicators.
Bitcoin – The 4 critical zones
The descent of the king coin began as soon as it reached its ATH in April. Since then, multiple break-ins and flash crashes have brought the coin down to $ 31,000, down 52%. As soon as the market saw the first signs of a turnaround, Cowen said,
“We could experience bearish times for 3-6 months”
And that’s what we did.
The 50-week SMA has been a consistently important level in Bitcoin’s history as it acts as an aid to a bull run. Previous cases related to 50 SMA show that a rebound from 2014 levels resulted in a price increase of 61%. Similarly, the coin rose 45% in 2018 and rose 34% again in 202 after testing the line for support.
Currently this level has already been negated as the 50 WSMA is placed at USD 32,000 while the price is already below that at USD 31,000.
Bull Market Support (BMS) is one of the most important zones which, as the name suggests, provides the perfect support for a bull run. Right now, Bitcoin is way below the BMS and if the king coin can even test it as a resistance it would be a great sign. In addition to the BMS, the 100 week SMA still retains its value as critical support as it has done in the past. The indicator at $ 20,000 is an interesting development as many institutions, including JPMorgan, are dropping Bitcoin to $ 20,000-25,000. Cowen said roughly the same:
“If we get back to $ 20,000 at $ 20,000 Bitcoin, in this scenario I can say that I would get a lot more bullish.”
Where to go next
Cowen believes Bitcoin has the potential to hit $ 100,000 by the end of the year only if it is able to reclaim the 20-week SMA. This line marks the upper band of bull market support. Once it turns back into support, a solid bull run can be seen in the BTC market.
However, this could only happen if Bitcoin moves sideways for a few more months. The consolidation would give BTC time for the bull market support to hit $ 30,000 and actually convert to support. This would be exactly what it takes for a bullish rally.