Bitcoin (BTC) may fall more than 40% from last week's bottom, new data warns as one analyst confronts what he says is now a bear market.
In a series of tweets on May 20, popular trader and analyst Rekt Capital argued that BTC/USD should dive to near $20,000 to conform to historical norms.
Death cross BTC price target now $22,700
Much debate has surrounded the so-called "death cross" constructions on the Bitcoin chart. These involve the declining 50-period moving average (50MA) crossing under the 200MA.
Often in the past, such an event has triggered considerable price downside, this then going on to mark what Rekt Capital calls "generational bottoms."
"More often than not, the depth of a $BTC correction pre-Death Cross is similar to retrace depth post-Death Cross," he summarized.
Both March 2020 and May 2021 broke the rules when it comes to post-death cross losses, however — in both instances, the death cross, itself, marked the bottom.
In January 2022, the historical trend seemed to return, as a death cross event came after BTC/USD had already declined 43% from its November 2021 all-time highs of $69,000.
Another 43% from there, however, puts the pair at $22,700.
"What's interesting about the scenario of a -43% post-Death Cross crash however is that it would result in a $22000 BTC," the concluding tweet read, alongside a chart highlighting key return on investment (ROI) opportunities during generational bottoms.
"Which ties in with the 200-SMA (orange), which tends to offer fantastic opportunities with outsized ROI for $BTC investors (green circles highlight this)."
Facing up to the bear market
Elsewhere, fellow analyst Filbfilb, co-founder of trading suite Decentrader, said the time had come to admit that Bitcoin is in a bear market.
Related: Bitcoin must defend these price levels to avoid 'much deeper' fall: Analysis
In his latest market update on May 20, Filbfilb flagged the one-year MA as the key level to regain to exit the quagmire which resulted after losing it as support in early April.
"Ultimately we continue to sit in a bear market. This has been the case since price retreated away from the 1yr moving average which we highlighted as a key risk [...] when price got rejected off that level," he wrote.
"Until we can reclaim that level we have to face the reality that we are in a bear market for $BTC."
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