Bitcoin is at a critical juncture, and crypto analyst Caleb Franzen is paying close attention. He recently analyzed a key chart that tracks Bitcoin’s performance since late 2022, with a focus on its 200-day moving average. In an interview with Thinking Crypto, Franzen explained that Bitcoin’s recent drop below these long-term averages is concerning. In bull markets, prices typically remain above these key levels.
If Bitcoin falls below that, it could mean that Bitcoin is entering a bearish phase. Franzen, however, is not panicking. He pointed out that there have been similar drops before, in August and June, and that Bitcoin has bounced back quickly each time.
What could happen now
Franzen used a simple analogy to describe Bitcoin’s potential. He believes that once Bitcoin breaks back above the moving average cloud, it could see a strong rally. But he also noted that the first attempt to break through may not be successful right away, based on past trends.
He said: “Bull markets are characterised by price trends above key short-term, intermediate-term and long-term moving averages. So if we break below those long-term moving averages, that’s not a bullish indication; we’re probably in a bearish regime.”
Looking Ahead: A Big Price Target
Franzen addressed the significance of Bitcoin’s temporary dips below short-term moving averages, noting that in a bull market, such dips are common and often followed by a quick recovery. He said that Bitcoin has consistently shown resilience, recovering quickly and maintaining its upward trend even after challenges.
Franzen also looks at the bigger picture. He thinks Bitcoin can reach at least $175,000 during this market cycle, using a method called the Fibonacci extension. He’s been holding on to this target for a while now and believes that if Bitcoin reaches this level, other major cryptocurrencies like Ethereum and Solana could also make big gains.
