Bitcoin Falls to $34,000? Experts Say the Ultimate Winners Are Long Term Holders
Bitcoin Falls to $34,000? Experts Say the Ultimate Winners Are Long Term Holders
Bitcoin (BTC) is testing its 200-week moving average amid an unprecedented capitulation, standing at a crossroads between a generational buying opportunity and further collapse.
Crypto analyst Lark Davis said in a video uploaded to his YouTube channel on February 7 (local time) that Bitcoin’s recent record-breaking drop amounted to a historic sell-off. He stressed that “Bitcoin plunged more than 10% in a single day, marking its largest drop since November 2022,” adding that “the Relative Strength Index (RSI) fell to levels similar to those seen during the COVID-19 crash.” He further analyzed that “this decline showed a close correlation with a sharp drop in silver prices,” explaining that “large funds sold large amounts of highly liquid Bitcoin to meet margin calls on their silver positions.”
Davis outlined three market scenarios: the good, the bad, and the ugly. In the positive ‘good’ scenario, Bitcoin finds support near the 200-week simple moving average, a key demarcation between bull and bear markets, and rebounds. He noted that in 2018 and during the COVID-19 crisis, Bitcoin also formed a bottom in this zone, adding that the current extreme oversold indicators could signal proximity to a market bottom.
In the ‘bad’ scenario, he warned that instead of a sharp V-shaped recovery like in the past, the market could face prolonged sideways movement and additional declines. Given significant macroeconomic uncertainty, prices could slide to around $50,000, below the 200-week simple moving average. Davis explained that if Bitcoin falls to the $50,000 range, it would represent a highly attractive accumulation zone for long-term investors.
In the most pessimistic ‘ugly’ scenario, Davis presented the possibility of Bitcoin retreating to around $34,000, a roughly 73% drop from its peak. This projection is based on historical patterns in which drawdowns have gradually diminished in each bear market. He emphasized that if this scenario materializes, it would constitute a once-in-a-generation buying opportunity. However, he cautioned that such an extreme decline would likely occur only alongside a collapse in the stock market.
Regarding speculation about potential liquidation risks for MicroStrategy, Davis dismissed the concerns, noting that Michael Saylor’s business structure is not determined by simple liquidation prices. He advised investors to avoid being swayed by pervasive fear and uncertainty, and instead pursue a strategy of steadily accumulating Bitcoin with a long-term perspective extending into the 2030s. He emphasized that the current painful phase in Bitcoin investing is an essential process for achieving the greatest future returns.
*Disclaimer: This article is provided for investment reference only, and no responsibility is taken for investment losses incurred based on it. The content should be interpreted solely for informational purposes.*
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