Crypto analyst Nicholas Merten warned that Bitcoin (BTC) could potentially fall below the lowest level of 2022. The host of the YouTube channel DataDash cautioned about Bitcoin’s current stagnation at the $29,000 level and claimed that it is on the brink of a significant drop.
Prominent crypto analyst Nicholas Merten emphasized that Bitcoin is facing a deadlock between $28,000 and $32,000 in the resistance channel. This corresponds to a price range that was previously a strong support for buyers but turned into a resistance zone after Bitcoin broke it in June 2022.
The analyst pointed out that the influx of buyers between June and November resulted in the price of Bitcoin starting to rise. This also led to the formation of a potential support channel considering the purchases made in June 2021. Following the collapse of FTX, this situation contributed to a new trend with higher lows and higher highs since October and November, indicating a positive trend.
Merten highlighted that bulls are drawing strength from this trend, and Bitcoin continues to maintain its positive trend. However, he underlined that it is only a few hundred dollars away from a potential trend reversal. The analyst warned about the dangerous proximity to breaking out of the resistance channel and added that this zone has now been reconfirmed as a supply zone or resistance, rather than a new support.
Merten stated that if the upward trend in Bitcoin does not continue, the largest cryptocurrency could fall below $16,000, the lowest level of 2022, by the end of the year or in the first quarter of 2024. He emphasized that if Bitcoin breaks the long-term resistance/support band downward and the momentum indicator turns red, BTC will likely revisit a long-term descending accumulation channel. This means that Bitcoin will move towards a new bottom zone in a bear market.
At the time of writing, Bitcoin is trading at $29,322, with a slight increase of 0.3% in the last 24 hours. While Merten’s warning indicates the potential risk faced by the crypto market’s volatility and investments in such assets, it also shows that investors should be prepared for a possible collapse if Bitcoin deviates from its current trend, despite the recent optimistic sentiment.