Analyst Warns Bitcoin Investors: Could Drop to $20,000 Level

Crypto analyst and trader known for his Bitcoin (BTC) predictions, Rekt Capital, has warned that history could repeat itself in the largest cryptocurrency, leading to a possible end-of-year decline. The analyst expects a pullback of up to $20,000 in the crypto king.

Analyst Warns Bitcoin Investors: Could Drop to $20,000 Level

Anonymous crypto analyst and trader Rekt Capital said on his personal account on social media platform X that if BTC follows a price pattern seen in both 2015 and 2019, before the two block reward halvings, it could drop to $20,000.

The analyst stated, “It happened in 2015, 2019, and maybe it will happen in 2023. There is a tendency for Bitcoin to revisit the bottom of the rising macro peak (blue circle) before the block reward halving.”

Another indicator that Bitcoin could revisit the $20,000 level is a gap created by transactions on the Chicago Mercantile Exchange (CME), according to Rekt Capital. He said, “If Bitcoin continues to form higher peaks, can it fill the CME gap around $20,000 in late this year or early 2024? If it does, it could revisit the bottom of the rising macro peak.”

The analyst also mentioned that another indicator of a potential drop in Bitcoin is when it falls below the 50-week Exponential Moving Average (EMA):

When BTC last turned back from the 50-week EMA (purple), it dropped by 20 percent. If history repeats itself and BTC retraces 20 percent from here, the price will fall into the region below $21,000 (green). This is where the daily CME gap is located (orange).

Bitcoin’s Downtrend Will Change if it Breaks the Falling Resistance Line

Meanwhile, Rekt Capital emphasized that the expectation of a downward trend in Bitcoin could become invalid if an important price level is broken. He wrote:

The situation here is really simple. If BTC can break the black falling resistance line, it will have a chance to break the $31,000 level. However, until then, there is always more downward movement potential.

According to the analyst, Bitcoin is unlikely to revisit the $31,000 level until the block reward halving expected to occur in April 2024. Rekt Capital also added that he expects a parabolic rally that will push BTC above $65,000 after next year’s block reward halving.