In his latest video analysis titled “BITCOIN’S One Indicator Signaling LAST Major Dip,” Dan Gambardello, a noted crypto analyst with 370,000 subscribers on YouTube, delves into the latest price action of Bitcoin to forecast what could potentially be the final major dip. After dropping as low as $60,000 on Wednesday, the fear of another deeper price crash has grabbed the Bitcoin market.

Why This Could Be The Final Leg Down For Bitcoin

Gambardello emphasizes the significance of the daily and six-hour charts. On the daily chart, Bitcoin is currently testing the 50-day moving average, a level that often serves as a litmus test for short-term market sentiment.

However, the analyst’s main focus is on the six-hour chart’s Relative Strength Index (RSI), a momentum oscillator used to measure the speed and change of price movements, which has hit oversold levels. According to Gambardello, the RSI reaching oversold territory is traditionally viewed as a bullish signal, potentially indicating an approaching end to the current price dip.

“The bottom is actually, I think, close. There could be some type of capitulation in the very short term, but I think there could be a very strong bounce after that happens,” Gambardello noted, suggesting that despite the immediate market turmoil following the Israel-Iran conflict news, the fundamentals point towards an eventual robust recovery.

Via X, Gambardello added, “Nothing like a 6 hour oversold RSI at the beginning of bull season. Also great during bull season.”

This assertion is grounded in his analysis of past market behaviors during similar conditions, reinforcing the cyclical nature of Bitcoin’s market dynamics. Drawing parallels to historical data, Gambardello highlights the behavioral trends of Bitcoin in previous Octobers, noting a pattern of initial declines followed by strong recoveries by the end of the month.

“October will close green. It’s always [like this] with the dip. People are just freaking out. I guess that’s it, but this gives us a little time. We’re getting all these red candles going into October, give us another week, maybe even two and we could get a pump, a breakout to the upside to end October,” Gambardello claims.

Further deepening the analysis, Gambardello discusses the potential scenarios around Bitcoin’s lower trend line, a recurrent support level over the past six months. He speculates that if Bitcoin approaches this trend line again, it could effectively serve as a robust support level, potentially marking the last significant downturn before a sustained upward trend.

Notably, one final touch of the trendline could bring down the BTC price as low as $50,000. However, Gambardello thinks that this is a less likely scenario as the 6-hour RSI has already hit oversold territory while BTC is currently bouncing off the 50-day moving average.

Moreover, Gambardello refers to Bitcoin’s performance in past halving years, which are typically followed by bull markets, as seen in 2016 and 2020. Gambardello suggests that the current year could follow a similar trajectory. “This is a Halving year. We’ve seen what’s happened in Halving years in 2020 and 2016 in October. Is it going to repeat?”

At press time, Bitcoin traded at $60,899.

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Bitcoin (BTC), the largest cryptocurrency in the market by trading volume and capitalization, has embarked on a renewed bullish uptrend, reclaiming previously lost territories and surpassing resistance levels, igniting optimism among investors. 

Currently trading just below its 25-month high of $49,000 at $47,900, Bitcoin has experienced a remarkable price increase of over 6% within 24 hours and a significant 11% surge over the past seven days. 

Mapping BTC’s Path Amidst Pre-Halving Rally

However, amidst the market’s excitement, it is crucial to consider historical tendencies and their potential impact on Bitcoin’s trajectory leading up to the upcoming halving event. Market expert and analyst Rekt Capital highlights two noteworthy historical patterns:

Firstly, the “Pre-Halving Rally” phase appears to be commencing. This phase refers to a period where Bitcoin experiences a surge in price before the halving event takes place. 

Secondly, historical data reveals that Bitcoin has struggled to break beyond the macro diagonal resistance before the halving, which Rekt places at $47,000. Additionally, it has encountered difficulty surpassing its Four Year Cycle resistance, which is approximately $46,000 in the current cycle.

It is worth noting that even though the price has surpassed these resistance levels, a consolidation or continuation of the uptrend must be seen, as a retracement could take place and leave the BTC price stuck between these resistances.

Given these historical trends, exploring how Bitcoin could potentially reconcile these patterns is interesting. Rekt Capital offers insights into one possible path that Bitcoin could take:

During the pre-halving rally phase, Bitcoin may produce limited upside, resulting in an upside wick at the end of February. This pattern has been observed in previous months and 2019. 

Following this, Bitcoin might establish another range at higher price levels in March, potentially allowing altcoin rallies to take center stage. Finally, a few weeks before the halving event, Bitcoin could experience a pullback, creating a pre-halving retrace.

This proposed path suggests that Bitcoin could surpass the Macro Diagonal resistance with an upside wick but remain below it in terms of end-of-month monthly candle closes during this gradually concluding pre-halving period.

Bitcoin Bull Run Indicator Flashing Buy Signal

Crypto analyst Ali Martinez has added to the growing bullish sentiment surrounding Bitcoin by highlighting a key indicator that suggests potential upside movement. 

According to Martinez, the Super Trend indicator flashed a buy signal on the BTC monthly chart. This tool is renowned for its precision in predicting bullish trends in Bitcoin markets.

The indicator’s track record underscores the significance of this buy signal. Martinez points out that the Super Trend has issued four buy signals since Bitcoin’s inception, and all four have been validated, leading to substantial gains. These gains amount to an impressive 169,172%, 9,900%, 3,680%, and 828%, respectively.

However, amidst the bullish outlook, Martinez also highlights a potential strategy that may soon impact Bitcoin’s price.

According to the Bitcoin liquidation heatmap, a scenario is unfolding where liquidity hunters could drive the price of Bitcoin down to $45,810. The intention behind this move would be to trigger liquidations amounting to a substantial $54.73 million.

It is important to understand that liquidity hunters aim to exploit price movements to trigger forced liquidations among overleveraged traders. By strategically driving the price down, they can force these traders to sell their positions, resulting in cascading liquidations that potentially amplify price downward movements.

Featured image from Shutterstock, chart from TradingView.com 

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The Bitcoin price has plummeted below the $39,000 mark, the lowest level since December 2. This significant drop can be attributed to three main factors that have collectively contributed to the current market sentiment and price action.

#1 Selling Pressure From Grayscale’s GBTC Outflows

The market has been heavily influenced by the continuous outflows from the Grayscale Bitcoin Trust (GBTC). Bloomberg analyst James Seyffart commented on the severity of the situation, stating, “Woof. BAD day for Bitcoin ETFs overall in the Cointucky Derby. GBTC saw over $640 million flow out today. Outflows aren’t slowing — they’re picking up. This is the largest outflow yet for GBTC. Total out so far is $3.45 Billion.”

Nevertheless, the volume on the Bitcoin ETFs remained very strong, surpassing $2 billion, with GBTC accounting for over half of this volume. The total volume for the first seven trading days approached $19 billion.

Interestingly, while GBTC experienced significant outflows, the broader spot Bitcoin ETF landscape paints a different picture. Excluding Grayscale, the nine new ETFs have collectively amassed 95,000 Bitcoin ($3.8 billion), in stark contrast to the 65,000 Bitcoin ($2.9 billion) that flowed out of GBTC.

22,000 BTC have been from selling from the FTX Estate, meaning not flowing into others. While the cessation of this supply overhang is generally positive for the market, it remains crucial to monitor whether the outflows from Grayscale persist or intensify, even after the conclusion of the FTX-related sell-offs.

#2 Futures And Options Markets Cool Down

A significant contributor to Bitcoin’s price movement below $39,500 is the cooling of activity in the futures and options markets. Notably, the open interest in CME Bitcoin futures experienced a sharp decline, shedding over $1.64 billion following the approval of spot BTC ETFs, indicating a reduction in market leverage and speculative interest.

Crypto analyst Skew provided a nuanced analysis of the market dynamics, particularly focusing on the interplay between Bitcoin’s perpetual futures (perps) and the spot market. Skew noted, “Nothing too conclusive yet in perps market other than shorts becoming the dominant position in the market currently. Perp premiums often occurring during periods of spot limit selling into price. Spot premiums notably when perps push price into areas of limit bids on spot exchanges.”

This observation points to a shift towards bearish sentiment in the perps market, with short positions taking precedence. The analyst also highlighted the current market’s lack of volatility and urgency, attributing it to decreased open interest and a focus on spot market flows.

Further shedding light on the market sentiment, options analytics platform Greeks.live added insights into the options market, particularly the behavior of Bitcoin’s implied volatility (IV) and the volatility risk premium (VRP). They noted, “Bitcoin fell below the $40,000 as short-term IVs recovered. Overall VRP has risen, and the Skew curve is skewed towards put options.”

This shift towards put options signifies an increase in market participants hedging or betting on further downside, thus contributing to the bearish sentiment. However, Greeks.live also pointed out that despite the bearish forces and the presence of panic orders, the overall market is still witnessing a balanced game between bulls and bears.

#3 Sentiment Shift – Calls For $35,000 Get Louder

The third pivotal factor influencing Bitcoin’s price drop below $39,500 is a notable shift in market sentiment, emphasizing the need for a correction after a prolonged bullish period. Charles Edwards, the founder of Capriole Investments, articulated the market’s current state, highlighting the abnormality of the recent price trends and forecasting an inevitable return to volatility.

Edwards stated, “We’re still not here yet. This pullback is very overdue and lower is healthier.” He pointed out the rarity of the current market conditions, noting, “It’s now been over 232 days since Bitcoin had a 25%+ drawdown in the prior 12 months. The last time this happened was more than a decade ago, in 2011! The current low downside volatility period is NOT normal. These dips usually occur every 2-3 months. Volatility will return.”

The recent price correction, although perceived as a healthy and overdue adjustment by analysts, has nevertheless instilled a sense of panic among traders and investors. The market’s sentiment has taken a negative turn, especially as Bitcoin experiences a -20% dip, a movement partly attributed to the overhang of Grayscale’s supply.

The once robust bullish optimism has waned, giving way to louder calls for a further decline to $35,000 or even lower. This shift in sentiment is quantitatively reflected in the Bitcoin Fear & Greed Index, which has moved to a neutral position of 50, marking a significant departure from the extreme greed observed during the uptrend.

At press time, BTC traded at $39,219.

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