$ 13,000 bitcoin price predictions emerge, with BTC falling below the historical trendline

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Bitcoin (BTC) prices broke below a longstanding wave of support that helped keep its strong bullish bias intact after the crypto market crash in March 2020.

The wave is known as the 50-week simple moving average, or 50-week SMA, and represents the average price traders have paid for Bitcoin over the past 50 weeks. Over the years and in 2020, its removal as a price floor has helped propel the Bitcoin market into severe downward cycles.

Bitcoin price drops below 50-week SMA over the course of history. Source: TradingView

For example, the 50-week SMA acted as a support during the 2018 bear market. The wave helped prevent Bitcoin from experiencing deeper downtrends between February 2018 and May 2018 as its price corrected from its then record high of $ 20,000.

Similarly, the wave provided Bitcoin with incredible support during its correction from its $ 15,000 high in 2019. In addition, it held up as the floor price until March 2020, when the arrival of the COVID-19 pandemic caused a global market crash.

Fractal Targets $ 12,000-13.0

The pseudonymous chartist “Bitcoin Master” shared its concern over the potential of Bitcoin to suffer an average price decline of 80% if it turns bearish on its 50-day SMA. The analyst noted that BTC / USD exchange rates could plummet as low as $ 13,000 if the said fractal plays out.

Meanwhile, Bloomberg Intelligence’s chief commodities strategist Mike McGlone also highlighted the 50-week SMA in a tweet in early July, but recalled the wave’s ability to hold back selling pressures. The analyst recommended that investors not immediately dump their Bitcoin holdings under the wave at the first dips.

“Selling bitcoin with initial drops below its 50-week moving average has proven to be a great way to lose money, even in bear markets,” said McGlone.

Bitcoin market analysts have mixed thoughts

Bitcoin’s recent slump came amid a global market decline fueled by fears that the highly transmissible delta variant of COVID-19 would slow the recovery caused by the reopening of economies.

Vijay Ayyar, head of business development at the Luno cryptocurrency exchange, noted that Bitcoin could continue to fall. In comments to Bloomberg, the former Google executive said the BTC / USD exchange rate could fall as low as $ 20,000. Nonetheless, he reckoned the pair would test $ 40,000 again the next time they hit.

“We need to build another base first before we can continue another uptrend,” noted Ayyar.

“We’ll be somewhere between $ 20,000 and $ 40,000 for the rest of the year.”

Jehan Chu, the founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital, set a safe downside target near $ 25,000 but warned of accelerated sell-offs if the bulls fail to recover. He said:

“The momentum of the crypto market stalled in the first quarter and threatens another reversal, possibly below the $ 25,000 level.”

Strong fundamentals and bullish signals remain

However, another analyst offered a different, more optimistic perspective on Bitcoin’s current position.

James Wo, founder and CEO of the global crypto investment firm Digital Finance Group, highlighted on-chain indicators, including a continued decline in foreign exchange inflows and active wallet addresses, as reasons to remain bullish on Bitcoin.

Bitcoin net position change across all exchanges: Glassnode

“If we look at these on-chain indicators, we can say that the majority of investors are waiting for important signals to get back into the market,” Wo told Cointelegraph.

Similar: Bitcoin bull outlines 7 steps to more fiscal incentives and higher BTC prices

Data from CryptoQuant, a South Korea-based blockchain analytics firm, also provided an optimistic setup for Bitcoin, citing the market value-to-realized-value ratio (MVRV) of the cryptocurrency.

In detail, the MVRV ratio represents the market capitalization of an asset divided by the realized capitalization. If the number is too high, traders can interpret the price of Bitcoin as overvalued, which indicates selling pressure. On the other hand, if the MVRV value is too low, traders can treat Bitcoin prices as undervalued, implying buying pressure.

Bitcoin MVRV hit its September 2020 low. Source: CryptoQuant

“Purchase [Bitcoin] at the same level in the previous cycle was observed between January and March 2017, “noted one of the CryptoQuant analysts, adding:

“It doesn’t sell on the ground, it prepares ammunition for the ground. Short-term data offers the likelihood of a test on the support, a good exposure opportunity.”

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every step of investing and trading involves risk and you should do your own research when making a decision.