Are These the Optimal Entry Levels for Bitcoin Purchase at the Present Time?
Blockchainedbb, a crypto analyst, is advising investors and traders to be cautious about buying Bitcoin at its current price levels. The analyst has provided a detailed analysis of the market conditions, highlighting the potential risks and suggesting an optimal entry point for accumulating BTC.
According to Blockchainedbb, while Bitcoin has not experienced a significant decline, altcoins have already suffered losses of up to 60% from their recent peaks. This has resulted in widespread portfolio losses, leaving investors with the difficult decision of whether to average down or cut their losses.
It’s important to note that the $55,000 level does not provide strong support for Bitcoin. The analyst points out that the grey boxes on the chart represent “fair value gaps,” which do not necessarily need to be filled. If these gaps are disregarded, Bitcoin could potentially drop further.
In order for the market structure to change in a bullish manner, Bitcoin needs to surpass $68,000, according to analysts. At that point, investors may consider buying with a target of $75,000. However, entering the market before it reaches this level would be risky, as the market could move in either direction.
The analyst warns that if the monthly fair value gap on the chart is disregarded, Bitcoin could drop to $42,000 before reaching $75,000. In such a scenario, holding altcoins becomes a significant risk, and some altcoins could potentially experience further losses of 40-60%. Even if Bitcoin eventually reaches $75,000, investors may only break even.
The analyst also highlights that ongoing geopolitical conflicts or the situation in the Middle East could contribute to further downside. Additionally, as crypto markets operate on weekends while other markets are closed, any negative reactions in gold, oil, or the S&P 500 could drag Bitcoin even lower.
Despite these challenges, the analyst does not anticipate a full-blown bear market from this point on. As it is an election year, the analyst expects the government to take measures to stimulate the economy, such as quantitative easing or interest rate cuts, potentially leading to a market rebound starting in June.
In conclusion, the analyst advises against averaging down until Bitcoin demonstrates a bullish market structure shift, which would be indicated by a daily close above $68,000. Investors should carefully consider their financial situations and the potential wait time required to break even and generate profits if Bitcoin loses the $53,000 support level.
It is worth noting that the crypto market has a history of sudden upswings, even in the face of bearish sentiments that have resulted in mass trader liquidations. Therefore, investors should be prepared for potential volatility, both downside and upside, in the coming weeks.