According to Fundstrat Global Advisors, a final large bitcoin selloff is imminent before buyers enter the market.
“Most short-term technical indications suggest an above-average possibility of a last sell-off type dip before this bottom,” says Mark Newton, Global Head of Technical Strategy at Fundstrat.
“Ultimately, we’re aiming to purchase declines at lower levels during the next 2-3 weeks, and any move down to test or momentarily drop June lows is an opportunity,” Newton said.
Bitcoin briefly fell below $20,000 on Wednesday, with the cryptocurrency remained under pressure as risk assets slumped generally.
According to the expert, bitcoin might reach a bottom in the $12,500-$13,000 zone, representing a 35% drop.
“Technically, there’s not much below $17,592 before $12,500-$13,000, which I think will be an excellent location for mid-term buyers to add to longs,” Newton said.
“The wave pattern since late May suggests that a final bottom below the June lows may be needed before a bottom is thought to be officially in place, which would mark the completion of a final decline in five waves.”