Key Points:
The Supertrend indicator for BTC has issued a "sell" signal, which historically has led to a price drop of 77%.
The cryptocurrency market sentiment index is in a state of "extreme fear," indicating that BTC investors may face more market pressure.
The SuperTrend indicator for BTC has issued a "sell" signal on the weekly chart, which historically usually marks the beginning of a bear market cycle.
The BTC weekly chart shows that when the SuperTrend indicator turned from red to green and moved above the price last week, it clearly issued a bearish signal.
This indicator overlays the chart to track BTC price trends, similar to a moving average. It incorporates the average true range in its calculations, helping traders accurately identify market trends.
The "sell" signal from SuperTrend was confirmed after the BTC/USD trading pair closed below the 50-week moving average (MA) on Sunday, a situation that historically usually marks the end of a bull market.
As shown in the chart below, in the past, when these two indicators confirmed together, they triggered significant corrections of 84% and 77% during the bear markets of 2018 and 2022, respectively.
Cryptocurrency analyst Bitcoinsensus noted in a post on the X platform on Monday: "The weekly SuperTrend indicator has turned red for the first time since January 2023 (the end of the bear market)," and added:
If history repeats itself, BTC could see a significant drop to the $75,000 level, primarily influenced by reduced demand from Bitcoin reserve companies and ongoing capital outflows from U.S. spot ETFs.
Cointelegraph reports that the crypto fear and greed index has fallen to an "extreme fear" level of 11 points, marking the lowest value since February.
Analyzing BTC's historical price performance when the index was at similar levels reveals two potential scenarios for the BTC/USD trading pair in the future.
In the first scenario, BTC may further decline before rebounding to a new all-time high, similar to the situation in 2021 when the index frequently fluctuated between "extreme fear" and "fear" from May to July. As a result, the price further dropped by 40%, before climbing to an all-time high of $69,000 in November 2021.
Analyst Milk Road stated in Wednesday's market newsletter: "The market may face more pressure in the short term, but a reversal is likely to occur in the next 2-3 weeks," and further emphasized:
In the second scenario, BTC may be entering a full bear market phase, similar to May 2022, when the crypto fear and greed index fell into the "extreme fear" zone and remained there until July.
This period marked the most severe phase of the 2022 bear market, with BTC plummeting from a previous all-time high of $69,000 to $15,000.
Related: Matrixport: Strategy withstands Bitcoin (BTC) plunge, still expected to enter S&P 500
This article does not constitute any investment advice or recommendation. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original article: “Bearish Bitcoin (BTC) Signal Emerges, Raising Risk of a 77% Price Drop”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
