The sharp decline in bitcoin and other cryptocurrencies looks to be slowing. Over the last week, the entire market has been much lower and has lost a chunk of its value. Nevertheless. Bitcoin had gained 14% on the previous day and had broken through the psychological barrier of $30,000 before reversing.
However, the cryptocurrency’s upside potential appears to be limited, and it could find resistance near $33,000 and $35,000. BTC is currently reaching immediate support between $27,000 and $30,000, which may help to steady price movement in the next few days.
Although heavy resistance and negative momentum signal limited upside over the next few months, the relative strength index (RSI) on the weekly chart is the most oversold since March 2020.
The worst-case scenario for Bitcoin?
The dot-com bubble in the late 1990s, according to widely-followed crypto expert Benjamin Cowen, is delivering a peek of what the crypto market’s bottom could look like. In a new video, Cowen discusses the worst-case scenario for cryptocurrency, which has seen Bitcoin (BTC) fall to less than half of its all-time high.
The Nasdaq fell by 83 percent before eventually reaching a macro bottom and beginning on another run, and then there was the financial crisis, which, of course, led to another bottom. According to Cowen, a crypto price decline of 80% is very likely. Now, for those who don’t like the idea of crypto correcting or don’t believe it can happen, I tell you that it can and does every few years.
“Sometimes I struggle to comprehend an asset class that has only a market cap of $500 billion, but considering that the asset class as a whole was $3 trillion not that long ago and we’re currently at $1.26 trillion, it’s not that far-fetched to assume that we can’t drop another 40% or so down to approximately $500 billion. I would consider that to be the absolute worst-case scenario.”