Analyst says Bitcoin could fall below $20,000 before resuming the rally
Overview
The past two weeks have been amazing for the price of Bitcoin. The digital asset managed to successfully exit a frustrating downtrend and reached its maximum in two months in the process. However, with the recent downturn, there may be more pain for bitcoin investors before the rally continues due to the turmoil. Analyst Justin Bennett says bitcoin's arrival below $20,000 is possible In a new report from the crypto trading newsletter, analyst Justin Bennett reveals some bearish market trends. First, it indicates that the market has enjoyed a good amount of gains, adding up to 28% to its value in just the last 18 days. But, as expected after this rally, the market correction led to a decline in the price of digital assets. Investors expect a 12% decline for BTC over the next couple of weeks while there has been speculation that this decline will only be temporary, Bennett explains that it could go much further. Now, the analyst does not stray from the uptrend that bitcoin is currently standing on, but presents a scenario in which the price of the cryptocurrency could return below $20,000 before resuming the rally. BTC could see below -$20,000 before resuming the rally Bitcoin has already retreated to the $20,000 area since the time of writing, giving credence to Bennett's analysis. However, with the main support for the digital asset now at $20,000, the bears can pull the price as close as possible to this support before the bears take charge again. "I would love for bitcoin to rise towards $25,000 and maybe $29,000, but not without a pullback in the $20,000 area in the first place," Bennett said in the news report. Factors driving this decline In the same newsletter, Bennett points to the release of PPI data that has struggled in the market. In the end, the long-awaited launch was less than expected, causing fatigue in the market. Bitcoin fell below $21,000 as a result. Also, referring to the US dollar index (DXY), the analyst explained that the movement of this indicator against the background of the release of PPI data would have been bullish for assets such as BTC. "But I think the markets have done it themselves, so a lot of this uptrend has already been priced," Bennett added. BTC corrects down after rally Since this pullback has dangerously pushed the BTC price close to the 5-day moving average, it should come as no surprise if the cryptocurrency loses a few hundred more dollars of value in the coming days. Bitcoin on exchanges drops by 44%, could this lead to a rise in BTC? However, the uptrend is expected to continue soon as trading volume remains high and investor sentiment reaches 9-month highs, hovering near greed on the Crypto Fear & Greed index. BTC is trading at $20,779 at the time of writing. Its price has fallen by 2.18% over the past 24 hours, but it has risen by 14.54% over a 7-day period.
