A popular crypto analyst looks at past Bitcoin (BTC) downtrends to predict a potential recovery timeline for the collapsing crypto market. For details, continue reading Kriptokoin.com.
When will the bear trend for Bitcoin end?
Crypto analyst Benjamin Cowen says that high-volume crash events indicate that historically a support level has been found and that Bitcoin could move upwards. The analyst points to crash events that took place in December 2018, March 2020 and May 2021. He says that despite Bitcoin’s recent price drop, it doesn’t mean a major capitulation is needed to provide support before the next big move to the upside:
That’s my philosophy at this point and that’s been the case throughout the entire first quarter, I believe the first quarter will be in a downtrend. You should assume that the bear trend will continue until proven otherwise.
The analyst thinks that the same individual investors who spurred Bitcoin’s 2020 rally were also responsible for its rise in late summer and fall 2021 rather than the wave of new investors coming into space. He cites both on-chain and social metrics as indicators:
I’ve been saying for a while now that the demand for Bitcoin from new market participants has been going for almost a year. We cannot say that he left in November. You don’t see many new market participants buying BTC at this point in the market cycle.
Regarding what it will take for Bitcoin to wake up and move up, the analyst highlights previous red candle trends in late 2019 and early 2020 that provided support for a market trend change that he calls “brick walls” followed by a BTC rally:
Now basically, once we liquidate everyone who wants to be liquidated, we can actually start to see a healthier market. We’re looking for another wall to hit.
The analyst says that no one knows for sure when such an event might occur, but he is confident that Bitcoin will regain positive sentiment in 2022:
I don’t think the whole of 2022 will be in a bear trend. I think the first quarter will be red and maybe the second quarter will be red too. But I think things will turn around later in the year.