Bitcoin (BTC) Could Fall As Low As $1,200 In 2020

Bitcoin (BTC) could fall as low as $1,200 towards the end of this bear market. At the moment, this sounds ludicrous to the vast majority of the market that is already expecting a rally to the moon now that halving is around the corner. However, what most of them don’t realize is that halving is just one other tool to help with the slow bleed that is going to take the price down to its previous peak of $1,185. The market at this point is ready to make a big decision, one that is likely to push the price down much lower. At this point, the bullish optimism is so high that no one is even prepared to entertain the thought of a decline down to $6,000 let alone $3,000 or below that. 

If we look at the weekly chart for BTC/USD, we can see that Bitcoin has done something for the first time and that is forming a lower peak than the previous one. We can see that during 2013-14 the price rallied to form a peak but that peak was much higher than the one that preceded it. However, this time the situation is entirely different with the current peak being much lower compared to the one that precedes it. This could be a very clear indication of what is about to come next. The Bitcoin bubble may be about to burst in the real sense if and when the price declines below the 200-week moving average and enters a long-term bear trend. This would be nothing out of the ordinary because it is quite clear that BTC/USD has not completed its correction just yet. 

The weekly chart for Bitcoin dominance (BTC.D) strengthens the case for a prolonged bear market. If we see Bitcoin dominance (BTC.D) shoot past the 200-week moving average, we would be looking at a reversion to pre 2017 levels that would absolutely crush the cryptocurrency market in general and the altcoin market in particular. These are serious threats that are being ignored while everyone is talking about the “rally to the moon” before the next halving. 

If the S&P 500 (SPX) starts to decline next, we could expect a major correction in the cryptocurrency market as well which would set the ground for the prolonged slow bleed that we will likely see this year. There is no lack of catalysts for the stock market to decline. It could be the Democratic presidential primaries or the Coronavirus outbreak or something else but everything is shaping up to point to an imminent decline. The commodities market shares a similar outlook which makes it even riskier to be long on Bitcoin at the moment. Things may be about to change and we might see the beginning of a downtrend in BTC/USD in the near future with some relief after the next halving and then a continuation of the slow bleed till $1,200.