Has Bitcoin Reached Its Bottom? Analyst Says It Still Has A Long Way To Go

Bitcoin has had a rollercoaster of a month in January. The digital asset which enjoyed much success in 2021 has walked into 2022 with bloody feet. Since then, it has managed to crumble more than 50% of its $69K all-time high. As nerves run high, investors scramble to make sense of when the onslaught will cease. As bitcoin is yet to see any significant support below the $40,000 level, analyst says the worst may be yet to come.

Bitcoin Has Lost Critical Support Level

Pseudonymous analyst Dave the Wave is known in the crypto space for being one of the few to call the May crash. Last year when prices of digital assets like bitcoin went into a frenzy, Dave had been one of those to sound the alarm for the incoming price crash. Not long after, the market had indeed seen a price crash that led to about a 50% downward correction.

Related Reading | Bitcoin Breaks $37,000, Why Downtrend To $29,000 Is Likely

This time around, the analyst has issued another warning. Using multiple charts, Dave the Wave lays out their analysis of the bitcoin market. The prognosis? Further downward correction towards $25,000 may be possible.

$BTC begins recovery trend | Source: BTCUSD on TradingView.com

The analysis spreads over multiple tweets where Dave the Wave educates their 90K Twitter followers on what they expect from the market. Firstly, they analyzed using the Fibonacci extension. After measuring its potential head and shoulders, landing on a downside of $25,000.

They note that bitcoin had already broken through a critical support level. Under which there is not much support, meaning that the price of the digital asset was prone to continue falling. “The problem is once it loses that 40K area, there’s not much support below,” the analyst said.

$BTC loses support at $40K | Source: Twitter

What’s In Store?

Naturally, the next steps were to figure out possible bounce points for the digital asset. They do this by mapping out where there would be a trend reversal. “A lower level again and lines of resistance that price would have to cross before even thinking of a trend reversal.” Since this call, the price of bitcoin has since fallen below this point, now touching as low as $33,000.

$BTC misses trend reversal | Source: Twitter

Related Reading | Market May Be Suffering But Bitcoin And Ethereum Will Pull Back Stronger, Bloomberg Analyst

Presently, the last chart in the series shows a possible upward reversal if the digital asset was able to hold above $35K.

$BTC fails to hold above $35K | Source: Twitter

Since the tweet went live, bitcoin has not done well in the market and has in fact dropped below this point. If Dave the Wave’s analysis is anything to go by, then investors may need to brace themselves for impact as the next stop may very be the $25,000 range, which is the next major support point.

Featured image from LinkedIn, charts from Twitter and TradingView.com