cryptocurrency analysis

Zooming out Bitcoin charts to longer-timeframes puts BTC price in the middle of a large bear cycle, according to one analyst.

Bitcoin (BTC) looks ready to fall below $30,000 in the coming months, per a confluence of historically accurate technical indicators brought forth by popular analyst Ari Rudd.

The independent market analyst published a thread on Feb. 14, explaining why Bitcoin's ongoing price recovery — from below $33,000 on Jan. 24 to around $42,000 on Feb. 14 — might not have strong legs.

In doing so, Rudd presented at least three long-term technical setups with extremely bearish outlooks.

They are listed as follows:

1. Bitcoin LFG model

Rudd's Logarithmic Fractal Growth (LFG) is a Bitcoin price prediction model that relies on BTC's fractals that consist of "logarithmic scales on both axes." It then projects where Bitcoin may go next based on its historical price actions.

The analyst applied the LFG model on a monthly BTC/USD chart.

As shown in the chart below, the LFG levels had posed as accumulation/distribution zones for traders during the previous bearish cycles. So, Rudd noted that Bitcoin still had to fall to the lowermost level range, a so-called buy-area that had coincided with bottoms during the 2018 and 2020 price crashes.

"We are a few months away from reaching the accumulation phase," Rudd stressed, adding that:

"Best possible scenario for buy opportunities will be 24K–27K levels."

2. Ribbon support

Like the LFG model, moving average ribbons have coincided accurately with the end of Bitcoin's bearish cycles, including 2018 and 2020, on a quarterly timeframe.

In detail, these ribbons represent a range of moving averages (MAs) that enables traders to identify key resistance and support areas by looking at prices in relation to the MAs. Each of Bitcoin's top-to-bottom trends earlier has exhausted near its so-called "ribbon support."

With the cryptocurrency undergoing another price correction from its $69,000–top, the analyst suggests that its strong bounce from near $33,000 could turn out to be a bull trap because the price is "due to retest the Ribbon support on [the] quarterly chart."

As a result, the moving averages ribbon indicator risks sending Bitcoin to $25,000 or below.

3. Weekly ribbon resistance, RSI

Another moving average ribbon indicator, but on weekly timeframes, has been instrumental in capping Bitcoin's ongoing price rebound.

Related: ‘Up only’ for BTC fundamentals — 5 things to watch in Bitcoin this week

The "strong resistance," as Rudd hinted, provided further bearish sentiment if coupled with Bitcoin's weekly relative strength index (RSI).

RSI gives traders cues about bullish and bearish price momentum. Rudd noted that the buying momentum weakened around a downward sloping RSI trendline, hinting at potential selloffs ahead for the BTC/USD pair.

A bullish takeaway, meanwhile

In contrast to the bearish technical indicators mentioned above, there are several Bitcoin on-chain indicators providing an interim bullish outlook.

As Cointelegraph covered earlier, Bitcoin addresses that hold at least 1,000 BTC have added more tokens to their balances during the recent upside retracement, signaling that the richest crypto investors have been backing the BTC's rebound move.

Additionally, the amount of Bitcoin held by exchanges dropped on Feb. 13 to its lowest levels in over three years, data from Glassnode shows, in a continuing bullish downtrend that has remained intact since the March 2020 bottom. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.