A crypto trader and analyst, Rekt Capital, recently took to Twitter to share a cautionary prediction regarding Bitcoin (BTC). According to Rekt Capital, BTC might be on the verge of a significant retracement, with a potential slide of up to 30%, possibly reaching as low as $20,000.
Rekt Capital’s insight was anchored in historical data, particularly the pre-halving phases of Bitcoin. They pointed out that in both 2015/2016 and 2019, BTC experienced retracements of -25% and -38%, respectively, leading up to the Bitcoin halving events. With the next Bitcoin halving approximately 180 days away, Rekt Capital used this historical context to support its forecast.
A key element of concern is the noticeable difference between the post-halving spikes in 2016 and 2020. This raises questions about whether the anticipated 2024 halving spike will match or fall short of the 2020 performance.
Analyzing chart patterns, Rekt Capital highlighted how the previous Bitcoin halving resulted in a spike that exceeded the 1:1 Gann line and nearly reached the 1:2 Gann line. In contrast, examining Bitcoin’s behavior in 2023, it is evident that BTC has been testing the 4:1 Gann line but facing rejection. Given Rekt Capital’s projection of an upcoming consolidation phase for BTC, it’s plausible that Bitcoin will continue to challenge the 4:1 Gann line.
A more optimistic observation can be found on the daily chart, where BTC has been forming higher lows since September 2023. Maintaining this trend in the coming weeks could potentially push Bitcoin’s price above $31,550.
However, there is a concerning signal coming from the Accumulation/Distribution Line (ADL) indicator, which gauges supply and demand. The ADL currently stands at 10.69 million, but it’s trending downward. This decline suggests that the current uptrend in BTC is not well-supported by trading volume, raising the possibility of a price drop. If a correction occurs, BTC might seek support at the $25,000 level.