BTC/USD Daily Chart (Coinbase) – Source: TradingView
The first target in this scenario is the $78,000 level, meaning that BTC can still drop by another 10.3% in the next few weeks.
The Relative Strength Index (RSI) is still on a free fall in this higher time frame, indicating that negative momentum continues to be strong as bears are in control of the price action.
Meanwhile, if BTC breaks below this short-term support area, the price could continue to move lower to $58,000. Now, this bearish outlook seems to point to the fact that whales are wrong. Aren’t they looking at the charts?
Most probably, deep-pocketed investors are focused on the big picture. They think BTC is cheap at $80,000. It can drop to much lower levels, sure, but they might keep buying if they believe that the fundamentals remain strong.
Now, that does not mean they will not suffer a strong setback in their positions if our bearish scenario unfolds to its full potential. The last time that BTC moved below its 50-week EMA, it lost 62% of its value in just a few months.
If this happens again, we may see BTC trading at as low as $36,000. This means that whales who bought at $80K will experience a 45% loss.
In this scenario, Saylor’s Strategy treasury may tumble, and the market might be shocked to its core. This reduces the likelihood that such a sharp correction occurs. In addition, whales will probably hedge their positions by buying long-dated puts with extreme strike prices to protect their trades.
In the short term, BTC seems ready to drop by another 10%. Nonetheless, in the long term, the “smart money” seems to be preparing for another historic climb.