dailyhodl.com
A crypto trader who accurately called the May 2021 collapse for Bitcoin has revealed his worst-case scenario for BTC now that it’s dropped roughly 50% from its all-time high for the second time in a year.
The pseudonymous analyst known as Dave the Wave tells his 90,000 Twitter followers that Bitcoin has lost a crucial support level at $40,000 and faces more downside risk.
According to the analyst, Bitcoin will likely hit support at $30,000 but is also vulnerable to dropping as far as $25,000 in a more bearish scenario.
“Ouch. The problem is once it loses that $40,000 area, there’s not much support below…
But support there is.
Best case [continued correction] scenario – $30,000
Worst case scenario – $25,000
Macro bullish.”
Dave the Wave uses Fibonacci extensions, plus identifies a possible bearish head and shoulders pattern to gauge a downside target of $25,000 for BTC.
“For those wondering about the fib extension here, it’s measuring a potential head and shoulders.”
The closely followed crypto trader says that for Bitcoin to generate bullish momentum, the flagship crypto asset would first have to convincingly cross above a descending resistance, currently at about $41,000.
“Keep it simple people.
A lower level again and lines of resistance that price would have to cross before even thinking of a trend reversal.”
At time of writing, Bitcoin is trading at $35,201, almost 50% down from its all-time high above $69,000