In a discussion dating back to the 14th of November, a crypto analyst pointed out how Bitcoin was defending the 50-week moving average, but might fall lower.
This slump would take it to the 100-week MA, and the depths of the bear market could even take it to the 200-week MA.
The 50 and 100-week moving average prediction has come true. In recent weeks, the 100-week moving average has been defended as support.
At the time of writing, it was at $85.5k, lining up well with the past month’s $84k-$85k demand zone.
Beimnet Abebe of Galaxy Trading was the analyst who had made this prediction. He also said that he “would be happy to buy” Bitcoin [BTC] at prices below the $80k mark.
Is crypto and Bitcoin set to suffer more- and not just in terms of price?
In a post on X, user InvestingLuc shared a (possibly apocryphal) story that explained why “crypto isn’t cool anymore.” The real question is, he wrote,
“Does real-world crypto utility generate enough demand to offset a sustained decline in retail participation?”
Social media engagement for crypto was down. Institutional interest in Bitcoin is a positive for adoption, but we might be straying from the decentralized, permissionless ethos of early BTC adopters.
It might be losing a part of its identity that captured our interest years ago.
The reduced volatility of Bitcoin
Speaking on the CNBC Squawk Box, Professional Capital Management founder Anthony Pompliano observed that Bitcoin volatility has likely halved compared to previous years.
The spot BTC ETF flows have been negative for the most part since the 10/10 crash.
Even so, the 70%-80% drawdown that has come to define bear markets of previous cycles might not occur this time, due to institutional investors. From $126k to $84k, BTC’s drawdown was a more modest 33.3%.
This retracement came at a time when the equity markets, such as the S&P 500 and the Nasdaq, as well as precious metals, are near or at all-time highs.
An argument can be made that the volatility drop that prevents massive drawdowns also limits the potential of bubble-like rallies.
Analyst Axel Adler Jr’s True MVRV metric on CryptoQuant rose to just 2.17 in 2024. It was unable to scale 2 even after making all-time highs this year.
This could be explained partly by how ETF flows don’t affect on-chain metrics.
At the same time, more participation from smart money, as well as Bitcoin being a maturing market, meant that volatility is less than in previous cycles, and holders are more ready to realize profits and exit.
Final Thoughts
- An analyst’s prediction related to a price drop toward $80k has come true, and the next prediction is that sub-$80k prices are a good buy.
- The crypto market was likely entering a bearish phase — There has been little demand in recent weeks following the 10/10 crash.
