Originally published on Jul 03, 2022 (updated February 11, 2023)
When the price of Bitcoin dropped below $19,000, a Bitfolio Academy member asked me, “What is your floor price for Bitcoin?”
Bitcoin in the Buy Zone
I recently published “My floor price for Bitcoin” on Tradingview, so I thought that I would share my bitcoin price analysis.
First, we very likely have already touched the floor price for Bitcoin. Looking at the weekly chart for Bitcoin, we can draw a trend line from the low in August of 2015. This is the orange line. We see that there is strong support for Bitcoin at roughly $17,500. Bitcoin is currently in the buy zone. And, the price of Bitcoin approaching $17,500 represents a significant buying opportunity.
Another reason I can say that we’re in the buy zone for Bitcoin is the 4-year moving average. Bitcoin has only been below the 4-year moving average three other times in its history. Bitcoin has only been below the 4-year moving average briefly in January of 2015, in August and September of 2015 and briefly in March of 2020. Currently Bitcoin is well below the 4-year simple moving average of $21,858. So the price of Bitcoin on Jul 03, 2022 of $19,000 was a buying opportunity.
Bitcoin Price Floor
Also, on the weekly chart, it’s possible to start the trend line from the low in August in 2016. This is the blue line in my chart. Using this trend line, we can see that there’s strong support for Bitcoin at roughly $14,800. So $14,800 is my worst case scenario for the floor price of Bitcoin. If we break through the $17,500 support level, $14,800 becomes my floor price for Bitcoin. On Jul 03, 2022, the orange trend line was holding. But, on November 9, 2022, we broke through to $15,550.
Also, for both of these trend lines there’s only one touch point. So this floor price was tested only once before. Or, we could say that the orange trend line has been tested twice. We tested the orange trend line in June of 2022 when Bitcoin dropped to $17,592.
As best as I can predict, my most confident floor price for Bitcoin is 14,800, which is my worst case scenario. I believe that November 9, 2022 was the Bitcoin bottom for the current cycle.
By the way, I’m also anticipating the Federal Reserve easing up on tightening. I am anticipating interest rate hikes into 2023. And, we can expect Bitcoin to struggle to recover until the Federal reserve becomes more dovish on their inflation fight.