Analyst Cred Lays Out ‘The Only Two Possible’ Scenarios For Bitcoin
According to a popular crypto analyst known as Cred, there are only two possible scenarios for Bitcoin (BTC) as the crypto market is looking shaky.
Scenario 1
In a recent TechnicalRoundup video update, the analyst projects that there are only two possible scenarios for BTC. The optimistic scenario is that Bitcoin will find support at around $30,000.
Cred notes that panic sell-off, led by fear, uncertainty and doubt (FUD), and technical sell-off should be separated from each other.
“The first option is $30k holds. That may seem self-explanatory, but the base case for being bullish at $30k is essentially all the very urgent [sell-off], and you can see that the way the market dropped from $60k to $30k on the ‘Elon [Musk] plus China FUD’ as opposed to the very regimented and more programmatic – less liquidation-driven selling we had from the more recent high. There are clear microstructural differences between those moves.”
The May 2021 Bitcoin crash and recovery gives confidence for Cred, that it could do the same again, assuming that BTC bottoms out at $30,000 level.
“That may sound self-evident, but the reason I bring it up is because how that trade unfolds, if it does unfold… it could be as straightforward as, you take this cluster and however long the reaccumulation takes within this cluster, you are a buyer within that price range ($30,000 – $37,500) and ideally trying to get your average as close to the bottom of the range as you can.”
Scenario 2
Cred calls the second and more pessimistic scenario for Bitcoin “the market breakdown generational opportunity.”
“The easiest way to describe premise two is that it’s essentially the $6k breakdown at $30k where the market creates a very large, very significant, all-eyes-on-deck level at the range low, which seems like it’s free money to buy every single time as volatility continues to contract.
So bounce from $30k and you get decreasing volatility as the recurring touches continue until you get a volatility expansion to the downside, and that expansion tends to be pretty meaty and pretty significant.
Very hard to get on board that type of move unless you’re comfortable with uncomfortable entries or chasing momentum far away from the breakdown level. But on average, eyeball a 30% to 50% decline from that major level being broken.”
However, the analyst points out that in order for the second scenario to happen for Bitcoin, a number of negative events would have to happen at the same time, ranging from frightening headlines to risk assets declining across the board.
“The world would have to be in a pretty messy place with a lot of surprise in the market in order for that scenario to come to fruition.
However, if there’s one thing I learned from trading crypto after all these years, is to never fully discount even the tail events or low-probability events.”
At the time of writing, BTC is trading at $36,993 down 16% on the weekly chart.
