- Bitcoin’s price trajectory might experience a 15-26% drop, as indicated by its quarterly chart.
- Historical data suggests Q3 might offer a prime buying opportunity for long-term investors.
Deciphering Bitcoin’s Recent Moves
The cryptocurrency pioneer, Bitcoin, showed a seemingly impressive return of 7.05% in the second quarter, marking its peak at $31,500. However, this uptrend was short-lived as market signals quickly pointed towards a potential trend shift. Consequently, BTC has witnessed an 8.70% decrement from this peak, positioning itself at $29,078 at the time of observation.
Delving into Bitcoin’s three-month price trajectory reveals that the initial impetus for the 2023 rally aimed to rectify the imbalance, or what experts term as the Fair Value Gap (FVG). For the uninitiated, FVG arises due to disparities in order flow, predominantly when either buyers or sellers overpower the market. This specific inefficiency was created in the second quarter of 2022, spanning from $25,200 to $32,853.
Making Sense of the FVGs
From the onset of 2023 until the culmination of the second quarter, Bitcoin admirably corrected the imbalance presented by the 2022 FVG. Nevertheless, in its attempt to counterbalance, it inadvertently created another FVG, stretching from $24,777 to $21,473.
Given that Bitcoin successfully adjusted the FVG upwards and harnessed the buy-stop liquidity, a plausible outcome would be a downward trajectory. In this context, a price drop ranging between 15% to 26% for Bitcoin doesn’t seem far-fetched.
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However, this potential dip isn’t a cause for alarm. On the contrary, such a decline may serve as a beacon for long-term holders, presenting an ideal buying window. But investors should be cautious. A breach below the $15,443 swing low would dismantle the bullish narrative by introducing a lower low. This scenario might accelerate Bitcoin’s depreciation, possibly plummeting to markers such as $13,000 and $11,898.
Yet, it’s worth noting that should Bitcoin persevere and extend its 2023 bullish rally, breaching buy-side liquidity thresholds of $47,448 and $48,200, the bearish perspective might find itself sidelined.
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