- The recent Bitcoin price volatility is setting the crypto market up for a potential bull run.
- Closing below the 20-week moving average signals an end to the bear market.
- Bitcoin could potentially drop to $22,400 and lower before complete reversal.
The recent Bitcoin price volatility is setting the crypto market up for a potential bull run, according to Dan Gambardello, founder of Crypto Capital Venture.
In a video posted to YouTube, Gambardello analyzed Bitcoin’s recent price behavior and compared it with a historical pattern. According to Gambardello, closing below the 20-week moving average on the weekly chart signals a likely ending to the bear market. It puts Bitcoin in a zone with a high tendency for an upward reversal.
Gambardello compared Bitcoin’s recent volatility with a similar pattern that played out in 2019, ahead of the 2020 bull run. Then, Bitcoin broke below the 20-week moving average, with room to drop further before reversing at the 50-week moving average.
This time, Bitcoin’s price on the weekly chart has dropped below the 20-week moving average. It has also replicated the 2019 pattern with a potential drop to $22,400, marking the 50-week moving average.
According to Garmbadello, a lot is going on in the crypto industry at the moment and could pressure Bitcoin’s price and push it lower. Some events he mentioned include the ongoing XRP and Ripple case, the upcoming CPI data, and the Fed’s interest rate decision.
From his analysis, Gambardello showed that Bitcoin has been trading along a rising wedge and is currently at the wedge’s tip. Hence, there is bound to be a breakout on either side of the wedge. According to him, if Bitcoin breaks above the wedge, we would likely see the price climbing toward the $40,000 region. A downward breakout would pressure the price lower, with a potential drop to $18,000.
The analyst believes Bitcoin price is at a critical level where traders need to pay close attention to its development. Before further support, Gambardello also identified some levels of significant importance that can play the role of a reversal level in combination with macroeconomic factors. He noted that the 200-day moving average around $23,500 could act as a mid-term support.
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