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Bitcoin (BTC) could be in for a return to levels not seen since before its 2020 bull market if history repeats itself.
It was according to a new analysis published on May 24, which studied the interaction of Bitcoin with its 200-week moving average (WMA).
Bitcoin floor target could be between $15,500 and $19,000
In a Twitter thread, popular trader and analyst Rekt Capital explained how BTC/USD could behave should it fall to retest the 200WMA.
A lifeline throughout the history of Bitcoin, the 200WMA is an ever-increasing line of last support that has never been permanently broken.
Currently sitting at around $22,000, data from Cointelegraph Markets Pro and TradingView shows that the level continues to act as a line in the sand when it comes to bear markets.
Once, rekt capital notes, bitcoin was "mean" under the 200wma — briefly capitulated before rising back, allowing it to remain in support and not to flip to resistance.
Those wicks, however, have involved up to 28% of the spot price, meaning that should a similar wick occur now, Bitcoin would end up at $15,500.
"BTC ranges from -14% to -28% below 200-MA. And since the $BTC 200-MA now represents the price point of about $22,000... A wick of -14% below 200-MA would result in a ~$19,000 bitcoin," Rekt Capital wrote.
"And if BTC were to repeat the March 2020 decline below $200 BTC MA, it would reverse the price of about $15,500."
"Pay attention" below $23,000
As Cointelegraph reported, much has been made of Bitcoin price action on May 24 compared to March 2020 at the height of the COVID-19 cross-market crash.
Related: Bitcoin dives to fill CME gap amid claim new all-time highs will take 2 years
Rekt Capital additionally examined historical drawdowns from all-time highs and Bitcoin's "death crosses" this month, producing a BTC price target of $22,700 — almost exactly at the current 200WM.
'btc slowly approaches the 200-ma historically, 200-ma tends to offer fantastic opportunities with an oversized roi for long-term investors $btc (green circles),' he added along with a graph showing the interactions.
'BTC should indeed achieve 200-m support... I think it's wise to be careful."
Fellow analyst PlanB, the creator of the stock-to-flow BTC price models, has also long championed the role of the 200WMA as support.
