How to find the new bottom for the bitcoin market?
The cryptocurrency market is going through difficult times. Bitcoin, which was recently storming historical highs, is now trading around $23,000 — almost 70% lower than its peak values. Many investors are wondering: where could the new 'bottom' for the first cryptocurrency be?
Historical support at the 200-week average
According to data from the CoinDesk analytics portal, bitcoin has always found support during bear markets at the 200-week moving average. This indicator is one of the most reliable for determining the long-term trend of an asset.
The current value of the 200-week average is around $22,600. Thus, we can assume that it is in the $20,000-$25,000 range that bitcoin may encounter strong support and begin to recover. Of course, the market may even break through this level, but the probability of such a scenario is not high.
Expert opinion
From a long-term perspective, the current correction in bitcoin looks quite normal. After the rally of 2020-2021, when the cryptocurrency's exchange rate grew more than 10 times, a healthy pullback was inevitable. It is important that bitcoin retains support at key levels determined by historical data.
If in the coming months the first cryptocurrency does test the $20,000-$25,000 area, this will be a good opportunity for long-term investors to enter the market or add to their positions. Of course, you need to take into account the overall situation in the markets and the risks associated with the high volatility of cryptocurrencies. But historical experience shows that even in the most difficult periods, bitcoin has recovered and gone on to reach new highs.