A popular cryptocurrency analyst is updating his outlook on Bitcoin (BTC) as a major event approaches.
Pseudonymous crypto trader Recto Capital told his 53,700 YouTube subscribers that Bitcoin is likely to repeat the pattern of 2016, leading up to the BTC halving in mid-April, when miners' rewards will be halved. He said it was likely to rise.
However, the trader warns that Bitcoin could fall sharply in the short term as the crypto tycoon remains within its re-accumulation range.
“So you can see that we are again within the reaccumulation range, very similar to 2016. And in 2016, we saw the downside deviation rise within the reaccumulation range.”
What we are seeing in this cycle is also a downside rally, but below the reaccumulation range, not within it, but just below it. It still pulls the retracement back within this overall reaccumulation range and maintains that reaccumulation range as it approaches the half-life event.
So, if history repeats itself based on 2016, we should see some upside in the pre-halving bull market. ”
Looking at his chart, the trader suggests that Bitcoin could rise to around $50,000 heading into the halving.
The trader also believes that Bitcoin could fall in the next two weeks and return to the $38,000 level.
“But the next two weeks will be very interesting because there is still potential downside below this reaccumulation range, as we saw in 2016. You will understand that. [in chart below] Several weeks of declines within the reaccumulation range.
So, if this is any indication, what if we still see sustained upside on the downside in this cycle within the reaccumulation range, and perhaps still some downsides below the reaccumulation range? ”
The trader also believes there is still a slight chance that the reaccumulation range will break and Bitcoin will fall below $38,000.
“This cycle could see a downward divergence below this range…
For Bitcoin to fall below $38,000, very specific conditions must be met…
However, as long as that reaccumulation range holds, it will only end up with a 21% retrace from the high, and history suggests that this reaccumulation range will likely remain for some time to come. Entering half-life.”
The trader suggested that the “worst-case scenario” for Bitcoin’s decline this cycle would be around the $32,000 level.
At the time of writing, Bitcoin is trading at $42,938.
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