A closely followed crypto strategist warns that Bitcoin (BTC) is giving off the same technical reading that flashed before the crypto king’s deep corrective moves in 2016 and 2019.
Analyst Jason Pizzino tells his 94,700 followers on the social media platform X that BTC respected the Gann 50% retracement level as resistance after last week’s close below $42,230.
Traders use Gann Indicators to spot key support and resistance levels as well as predict market tops and bottoms.
Says Pizzino,
“There it is – a weekly close under Gann 50% level on extremely high volume and reversal bar.
Bitcoin is down 15% from the high. The next major downside target is the next Gann 50% level at $37,000.
After all the hype, now downside targets don’t seem so far-fetched.”
Last week, Pizzino issued a warning, saying that BTC also respected the Gann 50% retracement level as resistance in 2016 and 2019 after its initial move from the lows. And in December, he shared a chart suggesting that BTC may correct after hitting the same technical indicator.
“Bitcoin history repeating?”
Looking at Pizzino’s chart, it appears that BTC pulled back by about 70% in 2019 after rallying to its Gann 50% retracement level.
Pizzino is also keeping a close watch on Bitcoin’s price action in the lower time frames. According to the analyst, BTC holders are currently in the process of selling off their coins based on a Wyckoff Distribution Schematic.
The schematic is a pattern that traders use to identify key market tops.
Says Pizzino,
“It looks like Bitcoin is in the Wyckoff Distribution stage at the moment which generally means investors are selling crypto. There’s also the Gann 50% level that BTC just closed under too.”
At time of writing, Bitcoin is trading for $42,603.
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