Rekt Capital has issued a word of caution that the downside in the Bitcoin bear market has yet to run its course. The analyst sees no reason to believe the worst is behind us; in fact, a 50 to 67% slide from present levels is not out of the question before this cycle concludes.
Why More Downside Is Expected
There is historical precedent for such an outcome, Rekt Capital notes. A look at Bitcoin’s price chart shows that a new EMA crossover has been the harbinger of a steep fall on every occasion. Given that this technical signal has been a reliable forerunner to major downturns over the years, it figures prominently in the current assessment.
Historical Patterns and Current Cycle
Bitcoin has seen a 38% decline since the last EMA crossover, but Rekt Capital is of the view that there are more losses to come. In fact, they see the prospect of a 50 to 67 percent drop from present levels. One need only examine prior bear cycles to see why: following a second or third local top, Bitcoin has been known to give back as much as 60, 50, or 67 percent. Such historical precedent would indicate that the steepest part of the current bear market may yet be in store for the asset.
What This Means for Investors
While Rekt Capital is of the opinion that the present bear market will not be as hard on investors as some in the past, the firm does not rule out substantial losses. According to the analyst, Bitcoin is in the process of making a fourth local top for this cycle. The track record shows that once such a high is put in place, the price tends to work its way down to the next support level. That is why a degree of caution is warranted. There is likely to be more downside and volatility before any recovery gets underway, even if one feels the bottom is not far off.
Source — Rekt Capital: https://www.youtube.com/watch?v=y1VZlQtjUwY