Why Bitcoin Could Trade Sideways For Two Months Before Crypto Winter Ends For BTC

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The Bitcoin bear market is similar to 2018, and experts believe an optimistic estimate envisions sideways price action for two months. BTC could start the next bull market after that, but a pessimistic estimate suggests an eight-month period of sideways movement. Analysts consider the $17,600 level to be the key to Bitcoin’s uptrend and set a target of $20,000 for the asset.

Bitcoin’s bear market in the current cycle is similar to the BTC trend of the crypto winter of 2018. Experts noted these similarities and shared an optimistic prediction of a bullish breakout after two months; a pessimistic outlook would imply eight months of sideways Bitcoin price action.

Also read: Bitcoin attracts mega whales with new moves, finds support at the $16,800 level

Bitcoin price could trade sideways for two months before a breakout

Bitcoin, the asset with the largest market capitalization is currently in a long-term downtrend on its monthly chart. Jiang Zhuoer, CEO and co-founder of Bitcoin mining pool BTC.TOP notes that starting from Bitcoin’s (BTC) previous all-time high (ATH) and ending with the next halving, BTC has broken through the bear market low in 2014 and 2018, respectively.

Zhuoer argues that if Bitcoin’s price bottomed out in 2022 and the FTX event pushed the price up to $15,476, then all three bear markets took the same amount of time between the previous ATH and the low. The 4-year halving leading to the law of the 4-year cycle still seems relevant.

Based on market sentiment observations, this is the latest period of sideways decline in the bear market. Events such as the bankruptcy of the Digital Currency Group have already been factored in and would no longer have a significant impact on the price.

An optimistic estimate therefore suggests that the current bear market and the 2018 bear market are similar, and the Bitcoin price could deteriorate for another two months before the next BTC bull run.

Zhuoer believes that a pessimistic estimate indicates an eight-month period of sideways movement before a rally in BTC, similar to the bear market of 2014.

Why do analysts consider $17,600 to be the key to Bitcoin’s price rally?

CryptoGodJohn, a crypto analyst and trader, considers the $17,600 level key for Bitcoin price. If BTC reverses the $17,600 level, the bulls can target the $20,000 level. The expert believes that failure to break above $17,600 could invalidate his bullish thesis and see BTC price revisit $15,500.

$17,600 is the most important level for me for $BTC

Flip $17,600, I wouldn’t be surprised to see a move towards $20,000

Reject probably revisit $15.5

— Johnny (@CryptoGodJohn) January 9, 2023 Where is the price of Bitcoin going?

Bitcoin price is in an ascending channel and on track to break above the upper trendline. If it does and accelerates its uptrend, it could rally to a target at the 61.8% Fibonacci extension of the channel height at $17,369. The bulls might even aim for the $17,448 level. Such a breakout from a higher ascending channel is often indicative of “irrational exuberance” however, and may foreshadow a breakout move from peak exhaustion, before a reversal from a steep decline, traders should therefore proceed with caution.

BTC/USDT Price Chart

Based on the chart above, the asset broke above the 200 and 50 day exponential moving averages, which is also a bullish sign. The Relative Strength Index (RSI) momentum indicator, however, currently reads at 75.71, which means Bitcoin is overbought. This indicates that bulls should refrain from adding new longs to their positions. When the RSI drops back below 70 and back into neutral territory, however, it will be a sign for traders to get out of their long positions and consider opening shorts instead.

A drop below the lower trendline of the ascending channel would completely invalidate the bullish thesis and suggest deeper losses ahead.

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