Bitcoin on Brink of Capitulation: Analyst Predicts 50% Plunge to $30K

Technical indicators suggest that Bitcoin (BTC) may experience a significant capitulation drop in the coming months. Crypto analyst Alan Santana anticipates a potential 50% decline from current levels to around $30,000, based on historical performance and current trading patterns. Declining volume and weakening Relative Strength Index (RSI) signal impending bearish momentum. Historical data indicates that May can be a challenging month for cryptocurrencies.

Bitcoin Faces Imminent Capitulation: Analyst Predicts 50% Price Drop to $30,000

As Bitcoin (BTC) continues to trade within a narrow range below $65,000, technical indicators and historical performance suggest that the cryptocurrency is on the verge of a significant capitulation event in the coming months.

Cryptocurrency trading expert Alan Santana, in a detailed analysis published on TradingView on April 27, warned investors of an impending "capitulation drop" that could lead to a precipitous decline in Bitcoin's price. Santana's calculations, based on Bitcoin's average trading range over the past month and a half, indicate a potential drop to $30,000, representing a decline of over 50% from current levels.

Several indicators, including declining volume and a weakening Relative Strength Index (RSI), point to bearish momentum building within the Bitcoin market. Santana outlined a potential scenario where Bitcoin experiences a sharp drop, followed by a period of stabilization.

"This is the final warning and a friendly reminder; what we are about to witness is a 'capitulation drop!'. [...] The 50% capitulation drop, we get a number in the range of $33,300. [...] The action should go something like this: The initial drop fast and strong; remember that the initial move is bearish marketwide, period. Then this move stabilizes and the ALTSBTC and smaller Altcoins will recover first. Mid-size second and the biggest one last," Santana explained.

Key resistance levels, such as the EMA50, have further confirmed the short-term bearish bias in the Bitcoin market. According to Santana: "Bitcoin moved back below EMA50 24-April and has been trading below. As long as the trading happens below this level, here set at $64,560; the short-term bearish bias is super strong and confirmed."

Historical Bitcoin performance also suggests the potential for a significant correction. May has historically been a challenging month for cryptocurrencies, particularly when prices have reached multi-year highs.

Despite the anticipated drop, Santana remains optimistic about Bitcoin's long-term prospects. He believes that the capitulation drop represents the beginning of a new bullish phase, with significant opportunities expected to emerge in late 2024 and throughout 2025.

"Although Bitcoin is about to go through this 50% capitulation drop, it will most likely recover between 30-50% before setting lower highs slowly again. This sets us up for the next leg, which is probably going to start showing signs of life within the first six months of 2025, a year that should see a new all-time high," Santana predicted.

At the time of writing, Bitcoin was trading at $63,519, reflecting gains of approximately 0.6% over the last 24 hours. However, in the weekly timeframe, Bitcoin declined by nearly 3%.

Technical analysis from TradingView indicates bearish sentiment, with a 'sell' rating from 11 indicators, 9 moving averages, and 2 oscillators. The post-halving retrace trend, where Bitcoin undergoes a correction before resuming its upward rally, further supports the prevailing bearish sentiment. Breaching below the $60,000 mark could further validate this sentiment.

It is important to note that this analysis should not be considered investment advice. Cryptocurrency investing involves significant risk, and potential investors should conduct thorough research and consult financial advisors before making any investment decisions.