One analyst braces for a potential dive below $30,000 as historical support levels remain far from the current Bitcoin spot price.
Bitcoin (BTC) may yet reenter the $20,000 zone, but the coming weeks could provide a solid buying opportunity, a new report forecasts.
In its latest market update on Feb. 24, trading platform Decentrader laid out the final areas of support between the current Bitcoin spot price and $20,000.
Analyst eyes BTC’s 20-week and 200-week MA for cues
Military action by Russia in Ukraine has markets in a spin Thursday, with stocks and crypto following a firm downtrend as uncertainty grips Asia, Europe and the United States alike.
Bitcoin has already lost 12% in under 24 hours, and expectations are that the worst is not yet over —reactions to the Russian offensive continue to flow in, along with potential financial sanctions.
As such, Decentrader, like many other analysts, is notably cautious on any trading decisions.
“During times of uncertainty such as this, it pays to be very clear on your strategy. For traders, having clear invalidation levels and strong risk management will allow you to survive,” analyst Philip Swift summarized.
“For longer-term investors, we are approaching historical major support levels, and anywhere in this region is likely to be a good place to dollar-cost-average over the coming weeks.”
While never being threatened in previous bear markets, an absolute line in the sand for bulls comes in the form of Bitcoin’s 200-week moving average (WMA), currently sitting at $20,000 and still rising.
More likely, Swift believes, is a dip below $30,000 to deviations below the 20-week moving average, something which characterized the pit of the March 2020 COVID-19 crash.
“Should price continue to drop, the 20WMA Deviation bands highlight a zone of potential support for Bitcoin between $29,382 and $25,253,” the update explained.
“The last time price deviated that far away from the 20WMA was during the March 2020 covid crash — though we came very close in the summer 2021 crash also.”BTC/USD chart showing support levels. Source: Decentrader
While difficult to imagine, upside targets in the event of a twist in Bitcoin’s fortunes are $37,500 and $41,100, it added.
Jaded Bitcoiners watch as gold booms
Decentrader is far from alone in advising traders not to let emotions get the better of them under current circumstances.
Popular Twitter account Crypto Chase likewise called for level-headed action, arguing that there is no need to abandon long-term strategies.
“Most likely going to be a volatile, headline driven couple of days ahead. Most would probably be better off flat (maybe even myself included), but time will tell. Typical trade, but volatile times. Caution recommended,” he wrote in his latest update.
XAU/USD 1-hour candle chart. Source: TradingView
The battle between gold and digital gold, meanwhile, continues to rage on the day, with XAU/USD hitting $1,970 and BTC/USD only marginally recovering from its overnight lows of $34,300.