Graph That Terrifies Bitcoin Foresees A Much Bigger Crash For Cryptocurrency

Graph That Terrifies Bitcoin Foresees A Much Bigger Crash For Cryptocurrency

The nightmare that bitcoin and cryptocurrencies are experiencing may still be far from over. The risk of the price falling to the area of ​​$ 20,000 is a reality for many analysts, which would already mean a notable decline from current levels. However, an American fund manager sees the risk of bitcoin falling back to four digits, based on chart analysis.

Louis Navellier, president, founder and fund manager at Navellier & Associates, says he has identified two shoulder, head and shoulder (HCH) formations that suggest bitcoin will fall below $ 10,000. In statements collected by Marketwatch , this expert explains that there is a large figure that can be seen in the graph and a smaller one that forms inside the ‘head’ of the first. If the $ 30,000 zone breaks, bitcoin could sink and lose one digit.

Right now, bitcoin is trading in the area of ​​$ 33,000-34,000, standing in the dangerous area of ​​the ‘collarbone’ of the HCH. If that area is pierced to the downside, the price of the cryptocurrency could plummet abruptly.

Figure shoulder, head, shoulder extended
However, experts at Ecotrader, elEconomista’s investment portal , only see clearly the smallest HCH figure that forms on the ‘head’ representing the silhouette of Elon Musk (Tesla CEO and cryptocurrency enthusiast , although sometimes very critical of bitcoin and its environmental impact ).

The long-placist figure presents more diffuse patterns, with shoulders that are relatively small compared to the head, according to Ecotrader . This would detract from said figure.

A large part of financial investment depends on psychological components that technical analysis tries to decipher through chart figures that visibly shape the behavior of investors in certain scenarios. Resistances or supports are usually the most used tools, but there are many other figures such as the HCH or the death cross that bitcoin has recently suffered .

The HCH figure is used to anticipate a change in trend from bullish to bearish, which is usually fulfilled in approximately 70% of cases, which gives this figure quite a bit of reliability. Graphically, it consists of a central bullish attempt (the ‘head’), preceded by a previous bullish attempt whose maximum is lower (‘left shoulder’), and followed by a subsequent bullish attempt whose maximum is smaller (‘right shoulder’). A trend line, called the neck line or clavicular line, joins the minima of the figure.

Retail investors will flee from bitcoin
Navellier, who claims to see two HCH figures, says that when he asks retail investors why they invested in bitcoins, most of the time it was because the price was rising. “If they bought it just because it was going up, they are also likely to sell it because it is going down. I think a break below $ 30,000 will lead to a huge disadvantage as the vast majority of trades in 2021 were over. of that level “, assures this manager of funds. Retailers will get scared and start to undo positions ( herd effect ).

The leverage in bitcoin is very very high, says this expert, which could also exacerbate any downward movement. This fund manager believes that “when (bitcoin) crashes this time, it will be more brutal due to the large number of retail investors involved,” says Navellier.

Michael Taylor is a journalist who intends to build a bright career in the media industry, He has a great interest and knowledge about the Business industry for CryptoNewsMarket. Hence, He loves to cover the hottest news in the Sports niche. Michael also published his articles in New York Post, NPR and Sky Sports.

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