Bitcoin prices could rise by as much as 240% from current levels if Bitcoin manages to hold above its 200-week moving average, according to Ark Invest’s asset-management specialists.
1/ Bitcoin has reclaimed its 200-week moving average after breaching it for only the 7th time in price history.
Bitcoin’s 1-year return after reclaiming the 200 WMA is on average ~240%. pic.twitter.com/Si1kXM7iKT
— Yassine Elmandjra (@yassineARK) August 3, 2022
«Bitcoin has returned to the 200-week moving average after breaching it for the seventh time in price history. The asset’s one-year return after reclaiming the 200 WMA is on average about 240%», — wrote analyst Yassine Elmandjra.
In the published report, Ark Invest noted that price action resembled a peak-COVID sell-off more than the 2018 bear market.
Analysts also suggested that should the correction be as severe as in 2018, Bitcoin could fall well below current levels.
Bitcoin prices have fallen 72% from their all-time high — typically the asset bottoms out during a global cycle after declines of more than 80%.
Ark Invest noted that one positive market signal is Ethereum’s price rise against Bitcoin. Analysts tie the dynamic to transition of the second-largest cryptocurrency’s blockchain to the Proof-of-Stake consensus algorithm.
«In July, Ethereum outperformed Bitcoin by 34%, indicating improved investor sentiment. Historically, ETH tends to outperform BTC during bullish cycles and lags during bear markets», the analysts explained.
Analysts also noted a decline in borrowed funds in the DeFi sector — since the start of the year the metric has fallen by 77%, while the total collateralization ratio reached 324%.
In August, Arcane Research analysts stated that if Bitcoin holds above $20,700, its price would quickly rise to the range of $27,000–$28,000.
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