As the crypto market continues to decline, there are a growing number of calls for Bitcoin to go as low as $10,000. So can Bitcoin drop that much? If so, how does this happen? What factors will prevent further price drops for Bitcoin?
Is Bitcoin (BTC) heading to $10k? Crypto analyst Lark Davis shares his opinion
cryptocoin.com Lark Davis, whose analysis we have shared, gave information about these questions in his latest video. Davis says the focus should not be on whether Bitcoin can trade at $10,000. Instead, traders should focus on the lower trendline that has formed since 2017. The analyst explained the reasons for this by citing historical patterns of the current bear market.
For example, Bitcoin has never dropped below the ATH level before. But it’s been doing this for the first time in its history in the last few weeks. Davis also said that BTC never closes weekly candles below the 200-week moving average. However, we are in a new era where this is similarly happening. Also, there has never been a more formidable monthly candle, with Bitcoin ending the month down nearly 40 percent before it happened last month. June 2022 represents the worst monthly candle ever for Bitcoin. Historical models are broken because this time is quite different.
Therefore, David recommends that traders focus on the bottom trendline that has formed since 2017. The analyst says it’s a more reasonable level to view this as a potential bottom breakout. Using this trendline as a forecasting tool suggests lows will be around $15,000. Davis predicts that many more investors will sell Bitcoin below this level.
Miners and whales equation
One of the big concerns most people have is that Bitcoin miners continue to sell their BTC. So, this will be a major catalyst for the price to drop. Davis claims that even though miners are selling, they do not control most of the Bitcoin supply. They only check 50,000 to 60,000 Bitcoins per month.
Therefore, in Davis’ view, the fear factor is not that big. They sell several thousand Bitcoins per month, although they have more. Meanwhile, according to Davis, Bitcoin whales added 140,000 BTC to their wallets last month. This is much more than miners sell. Even retail investors bought more than 36,000 BTC in the last month. These amounts far exceed the sales made by the miners. However, Davis predicts a tough July for Bitcoin, mainly due to macroeconomic events.
Lark Davis expects a rough July for BTC
Inflation data will be released on July 13, and the Fed meeting on July 26. However, Davis believes there is a light at the end of the tunnel. For example, commodity prices (such as oil and wheat) began to fall significantly.
These drops are starting to have a ripple effect. For example, the cost of shipping a container from Shanghai to Los Angeles fell 38%. This is a huge reduction in shipping costs. Davis explained that a market rally is likely if inflation figures fall and raise federal rates only 0.5 percent instead of 0.75 percent. However, he said the market should be prepared for the opposite of the above scenario.
