Crypto analyst Nicholas Merten is warning that Bitcoin (BTC) is inches away from a “breaking point” which could cause a major capitulation event.
In a new video update, Merten tells his 511,000 YouTube subscribers that what has historically been a “buy-the-dip” support level for Bitcoin is now disintegrating.
“The fact that we are well suspended and not even coming up to retest those 200-days (moving average), as well as the 200-week [moving average], is a big worrying sign here.
And when we just zoom out here you can start to see what I mean here as the 200-week usually was the ‘buy the dip’ opportunity for Bitcoin. It is now acting as resistance alongside the cross of the 200-day below that 200-week. So this is already one big issue here.”
Merten foresees a scenario where BTC briefly rallies to about $18,000 before turning around and triggering a capitulatory event that takes the flagship crypto asset to new lows near $13,000.
“With Bitcoin, I want to emphasize our breaking point here, which is if we really break below the previous lows and this line of sloping resistance, if we can’t hold this descending line of previous resistance, that is going to be a major warning sign.
Essentially speaking, if we see price even if it comes up here towards the previous resistance range or previous support range at around $18,000 and we zigzag below here breaking below those previous lows [of about $15,400] that is your warning sign for major capitulation.”
Source: Data Dash/YouTube
At time of writing, Bitcoin is changing hands at $16,804.