Senior crypto trader Tone Vays warns that the moving averages of Bitcoin (BTC), the largest cryptocurrency by market cap, are showing signs of potential disaster in the coming months.
Tone Vays conveyed his expectations on Bitcoin price
In the past few weeks, Bitcoin (BTC) has started to decline. By the end of January, the price of BTC dropped from $ 42,500 to $ 33,350. Vays tells his 120,000 subscribers that Bitcoin’s seven-month moving average is in danger of falling below its 20-month moving average. The analyst states that this has historically caused a depreciation in the market and in the BTC price. Vays uses the following expressions:
We want to avoid this moving average crossover. The only way to avoid this moving average crossover is for prices to break above the short-term moving average of around $50,000 in the current month or next month. This is the only way we can avoid the upcoming and avoidable moving average crossover.
Could BTC lose 50 percent of its price again?
The trader pointed out that Bitcoin (BTC) lost half of its value when the last seven-month moving average fell below the twenty-month moving average. The analyst said that when this intersection last occurred, the BTC price fell by more than 50 percent, and that a pullback was seen until the next moving average. He thinks that this 50 percent drop could be repeated again if BTC changes hands at the $40,000 levels at the moment this moving average crosses again.
Going forward, Vays warns other traders that a 50 percent drop in Bitcoin is within the range of possibilities. He says he wouldn’t be surprised if BTC relapses into an uptrend after repeating a price drop like it did in November 2018, falling from $40,000 to $20,000. In other words, the trader maintains his bullish outlook in the long term, even if there is a decline at first. At the time of writing, Bitcoin is changing hands at $38,304, down 0.4 percent. While the leading cryptocurrency has gained 3.6 percent in the last week, it is observed that it has lost 20 percent over the past month.