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Analyst Claims Bitcoin is Bearish Despite Bullish Narrative — is He Right?

Published September 20, 2023 12:21 PM
Nikola Lazic
Published September 20, 2023 12:21 PM

Key Takeaways

  • Macroeconomic environment is changing and turning bearish.
  • Bitcoins price ended its rise for this year.
  • First target at $22,000 but next could be at $11,000.

DataDash, a YouTube channel known for its insightful cryptocurrency market analysis since 2017, is led by founder and host Nicholas Merten.

With 12 years of experience in traditional markets, Merten offers a unique perspective by relating the crypto market to traditional financial markets.

In a recent video  titled “The Bitcoin ‘Relief Rally’ Is Finally Over”, Nicholas expressed his bearish stance on the price of Bitcoin. He told his over 500,000 subscribers that the bullish narrative driven by the ETF, de-dollarization, BRICS, and Bitcoin bank run has fallen flat. 

He continued to explain that this situation might create an opportunity for a bearish decline, mainly influenced by the Federal Reserve’s more cautious approach. This could, in turn, lead to a more extensive Bitcoin drop, causing liquidations and worsening the overall downward trend.

When looking at stocks and traditional indicators, Merten suggests that changing economic conditions are likely to lead to corrections in different sectors, including Bitcoin. He describes this as a period of relative calm before a potential storm.

The question arises: Is Merten’s assessment accurate? Did Bitcoin indeed reach its annual peak in July, and if so, to what extent might it decline?

Bitcoin Price Analysis

As we’ve consistently highlighted in our recent Bitcoin analyses, we anticipate a downtrend. This expectation stems from the conclusion of the previous uptrend, which commenced on November 21 of the previous year and concluded on July 14.

This conclusion is substantiated by both the wave structure, which completed its five-wave impulse, and the subsequent sharp decline to $25,500. This level marks the starting point of the previous upward surge and effectively nullifies all prior gains.

More downside expected
Chart shows further decrease may happen

The price fell by 21% from July, getting its lowest point on September 11, just below $25,000. Now, a minor uptrend started and it’s likely to be a corrective wave 2 or wave B from the ABC correction, which is the distinction between two macro scenarios. 

In the first, less bearish scenario, Bitcoin’s bull cycle began on November 21 with an initial sub-wave within the larger move. According to this view, the creation of the first higher low in the bull market isn’t an ABC correction.

In this scenario, the decline could find support at the optimal point of $22,000 but could reach as low as $15,700 without invalidating this analysis.

In the more bearish scenario, the rise from November 21 to July 14 is considered a five-wave impulse. The wave C, which began on July 18 the previous year, is identified as wave 4 in this bearish cycle. This implies that a final wave 5 started on July 14, potentially leading Bitcoin to drop below its low from June 18 the previous year.

The next significant support zone would be at around $11,000, which is the price target for the end of this macro wave 5. 

Conclusion 

It seems Nicholas Merten’s analysis is noteworthy. The price indeed ended its uptrend in July, suggesting a new period of downward movement. The extent and momentum of this expected decline will determine whether the price can begin an upward reversal to continue its bullish trend, or if it needs to clear another lower low before the next bull market can start.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

 

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