The year 2022 has been a real nightmare for investors so far. Virtually all risk assets, including bitcoin, have lost a significant portion of their value this year. Now, according to analyst Matthew Hyland, a scenario is playing out in which the markets can expect one more severe correction.
The kiss of death
The S&P 500, the most important gauge of US industry, is receiving a so-called “kiss of death.” We speak in technical analysis of a kiss of death if the price is rejected on the 21-month exponential moving average.
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That’s exactly what we experienced in 2001 and 2008 before the major stock index took a nosedive. Once again, this scenario is playing out and the market seems to be gearing up for the final blow to the downside before we can finally talk about a bottom.
It therefore seems that a crucial week is ahead of us. If history repeats itself, then the bitcoin price will probably also make a new hit. It is not clear exactly where we will end up, but a deeper bottom cannot be ruled out in advance.
Bitcoin price of 10,000 dollars?
The big question is how bad a deeper bottom for bitcoin can get. During the price drop of last June, the bitcoin price fell back to $ 17,600, but there is little chance that we will stop there if this scenario plays out. In theory, this could lead to a complete capitulation of the financial markets, causing extreme price falls.
If the S&P 500 loses 50 percent of its value from here, there is a chance that bitcoin will do at least the same. This brings the bitcoin price from the current $ 19,000 to less than $ 10,000. A dramatic scenario, so let’s hope this doesn’t play out.
On the other hand, it does give convinced hodlers the chance to meet their bitcoin goals. Buying just that one extra bitcoin will become a lot easier if the price soon hits the $10,000 mark. That too is something many hodlers have in mind.