3 Things to Watch to Identify Bitcoin’s Breaking Point: DataDash
DataDash founder a veteran crypto analyst Nicholas Merten predicts more pain ahead for Bitcoin’s price based on a combination of technical indicators and macroeconomic pressures.
The analyst referenced price charts for three different assets to back up his claim: BTC, ETH, and AAPL.
Where Bitcoin’s Price Will Crumble
In a video published on Wednesday, Merten began by pointing out how Bitcoin remains suspended well below its 200-week moving averages (WMA) and 200-day moving averages (DMA). The former has historically been a long-standing price floor for Bitcoin but flipped from a line of support into resistance for the first time ever in 2022.
“The fact that we are well suspended and not even coming up to re-test those 200 day, as well as the 200 week [averages], is a big worrying sign,” said Merten.
Secondly, the relief rallies Bitcoin has managed to muster from its new lows throughout 2022 have “continued to get weaker and weaker.” This indicates that Bitcoin bulls “aren’t showing up to the plate” as they once did, which could signal a major capitulation wave to come.
Market order flow has also been negative week after week – meaning traders are continuing to sell and “take the best available price.”
“The industry is going through its biggest restructuring since the Mt. Gox hack back in 2014 and 2015,” said Merten.
As for Bitcoin’s “breaking point,” the analyst suggested that the asset could experience a “major capitulation event” if its price plummets below its 2022 low of around $15,600.
Ethereum, he said, is also still at “highly suspended levels.” Merten predicted that a break on its 200 DMA against Bitcoin could place a “50% correction in the cards.”
The Macro Picture
Moving into the broader equities market, Merten highlighted the monthly chart for Apple stock, where he identified signs of fading momentum from its years-long uptrend.
Like Bitcoin, the chart’s 200 DMA and WMA both show signs of a bearish reversal. Merten suggested that Apple, alongside other major tech companies like Amazon, could possibly deviate below their 200 WMAs for the first time since the dot com bubble.
Macroeconomic pressures from rising interest rates have helped culminate in the failures of multiple crypto companies in 2022, as Bitcoin’s price fell over 75% from its highs in November 2021. With the fall of Sam Bankman-Fried’s FTX empire, Merten expects that more companies are yet to “unravel” with “uncertainty” already growing around Grayscale, CryptoCom, and Binance.
“While I’m not here to spew unnecessary FUD… there are still things being unraveled,” he said.
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I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.