With a combination of historically accurate technical indicators, Bitcoin (BTC) looks poised to drop below $30,000 in the coming months, according to popular analyst Ari Rudd. The independent market analyst explains why Bitcoin’s continued price recovery on February 14 (from under $33,000 on January 24 to around $42,000 on February 14) may not have strong feet. We have prepared for the readers of Kriptokoin.com the analysis of Ari Rudd, who presents at least three long-term technical setups with an extremely bearish outlook.
Bitcoin Logarithmic Fractal Growth (LFG) model
The analyst’s LFG is a Bitcoin price prediction model based on BTC’s fractals consisting of ‘logarithmic scales on both axes’. It then predicts where Bitcoin might go next based on historical price movements. The analyst applies the LFG pattern to a monthly BTC chart. As the chart below shows, LFG levels had created accumulation/distribution zones for traders during previous bearish cycles. Therefore, the analyst notes that Bitcoin should still fall into the lows range, which is called a buying area that coincides with the bottoms during the 2018 and 2020 price drops.
BTC monthly chart with LFG / Source: Ari Rudd, TradingView “We’re a few months away from reaching the accumulation phase,” Ari Rudd said, adding that the best possible scenario for buying opportunities He states that there will be 24 thousand–27 thousand levels.
Ribbon support
As with the LFG pattern, the moving average stripes correctly coincided with the end of Bitcoin’s bear cycles, including 2018 and 2020, on a three-month timeframe. In detail, these strips represent a series of moving averages (MAs) that allow traders to identify key areas of resistance and support by looking at prices on the MAs. According to the analyst, each of Bitcoin’s top-down trends has exhausted near the ‘ribbon support’.
As the leading cryptocurrency undergoes another price correction from the $69,000 high, the analyst thinks its strong bounce around $33,000 could be a bull trap. He suggests that it was formed because the price was ‘retesting the strip support on the quarterly chart’.
BTC quarterly price chart with moving average stripes / Source: TradingView As a result, the moving average stripe indicator risks sending Bitcoin to $25,000 or below.
Weekly strip resistance, RSI
Another moving average stripe indicator, but on weekly timeframes, has been instrumental in limiting Bitcoin’s continued price rise. The ‘strong resistance’ as implied by Ari Rudd, coupled with Bitcoin’s weekly relative strength index (RSI), provides further bearish sentiment.
BTC weekly price chart with strip resistance and RSI / Source: TradingView The RSI gives traders clues about bullish and bearish price momentum. Ari Rudd notes that the buying momentum has weakened around a downward sloping RSI trendline, indicating potential selling for BTC.
There is also a bull package for Bitcoin
In contrast to the bearish technical indicators mentioned above, there are also several on-chain Bitcoin indicators that provide a temporary bullish outlook. Bitcoin addresses holding at least 1,000 BTC added more tokens to their balances during the recent upside correction, suggesting that the wealthiest crypto investors are supporting BTC’s recovery.
Bitcoin balance on Exchanges / Source: Glassnode Additionally, according to Glassnode data, the amount of Bitcoin held by exchanges is on February 13, which has remained intact since the bottom of March 2020. It slumped to three-year lows in a bullish downtrend.
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