The current crypto market has moved back down after a few hopeful days and weeks. The Bitcoin price is moving towards $40,000 again. There could soon be a Bitcoin bear market again. These 3 indicators speak for a bear market that could drop the Bitcoin price to $24,000.
Bitcoin Bear Market Indicators – 1. Bitcoin LFG Model
The Logarithmic Fractal Growth (LFG) is one of the many price models for the Bitcoin price that are regularly used for forecasting the development of the Bitcoin price. The specific model refers to historical price developments.
Certain distribution and accumulation zones are defined in the model mentioned. The area in which there is a perfect buy zone for Bitcoin is still far away for traders at the moment. According to this model, this is between 24,000 and 27,000 dollars. Bitcoin would thus experience an even stronger bear market until the trend reverses again.
2. Loop support
Like the LFG model, moving average loops have coincided with the respective ends of bear cycles, including 2018 and 2020. These loops represent a range of moving averages that allow traders to find specific areas of resistance and support.
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As in the past, we saw a "loop support" again and again, which represents a bull trap. A bullish breakout was followed by another Bitcoin bear market, falling to bottoms. The breakout from $33,000 to above $40,000 may have been that bull trap. Accordingly, Bitcoin would soon fall more sharply.
Bitcoin Bear Market Indicators – 3rd Weekly Loop Resistance, RSI
Another loop indicator can be plotted on a weekly time span. In this plot, we can see that bullish momentum met resistance at the point when it hit a declining RSI (Relative Strength Index) trendline.
The RSI indicates the current bullish or bearish momentum. The fact that Bitcoin price saw resistance when it hit the declining RSI trend line suggests possible heavy sell-offs in the coming weeks. This would mean a stronger Bitcoin bear market.
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