According to Tyler Jenks, the president of Lucid Investments, bitcoin could fall back to $4,200 in the near future and may eventually drop to $1,000.
I have not commented on Bitcoin since we broke up through the $4,000-4,200 resistance zone. I believe we are headed back down to that zone and it will not hold. New lows coming. Target of $1,000 unchanged.
The prediction of Jenks was released as the bitcoin price showed signs of a retracement on April 11.
In the last 24 hours, the bitcoin price dropped from its 2019 high at over $5,400 to briefly below the $5,000 mark. But, a fairly large number of analysts remain cautiously optimistic about the trend of the dominant cryptocurrency.
Since March 12, in the past 30 days, the bitcoin price is still up about 30 percent against the U.S. dollar and has shown strong momentum.
As technical analyst Josh Rager suggested, following a 30 percent increase in price, any asset can be vulnerable to a retracement.
He further emphasized that the accumulation phase of bitcoin, a period in which investors begin to purchase the cryptocurrency after a 16-month bear market, may take longer than the expectations of investors.
“BTC could see some sideways action in the next couple weeks up until Bitcoin CME Futures expiration on April 26 Not exactly expecting fireworks. But it’s only one scenario and it is a volatile asset. This accumulation cycle can likely take a lot longer than most people think,” Rager said.
In the past several hours, bitcoin has already rebounded above the $5,000 level and is demonstrating signals of a short-term corrective rally following a 5 percent drop in value.
On April 12, according to Fundstrat Global Advisors head of research Thomas Lee, the “Bitcoin Misery Index” reached 89. Traditionally, Lee said that a BMI of 67 and above was only seen during bitcoin bull markets.
The high BMI of bitcoin indicates that investors are showing a bull market like interest in and demand for the cryptocurrency. But, it also could lead to investors taking profits and prolonging the accumulation phase of the asset.
“The Bitcoin Misery Index reached 89 on 4/2. Highest reading since June 2016. Means good and bad. Good–> Since 2011, BMI >67 only seen during BTC bull markets. More evidence bull starting. Bad –> BMI >67 after peak, BTC falls ~25% = Profit taking ST,” Lee explained.
Lee added that the bear market for bitcoin most likely ended when the asset reached its lowest point at around $3,122.
“The main takeway is that BMI reaching 67 is further evidence the bear market for Bitcoin likely ended at $3,000.”
Both technical traders and strategists in the cryptocurrency sector generally believe that bitcoin established its bottom.
Some in the likes of Multicoin Capital general partner Vinny Lingham has said that BTC would have to surpass bigger resistance levels such as $6,200 to confirm a bottom and the start of a bull run.
“That said, if we can break $6200 for BTC, it will likely mark the start of another major bull run and could run hot and high, but if it’s pure speculation and other assets benefit disproportionately to value created, it’s likely not going to end well again,” Lingham said.