Bitcoin is at a critical point, and crypto analyst Caleb Franzen is paying close attention. He recently analyzed a key chart that tracks Bitcoin’s performance since the end of 2022, focusing on the 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 usually stay above these key levels.
Dropping below them could signal that Bitcoin might be entering a bearish phase. However, Franzen isn’t panicking. He pointed out that similar drops happened before, in August and June, and each time Bitcoin quickly bounced back.
What Could Happen Next
Franzen used a simple analogy to describe Bitcoin’s potential. He believes that once Bitcoin gets back above the moving average cloud, it could see a strong rise. But he also noted that the first attempt to break through might not succeed right away, based on past trends.
He said, “Bull markets are characterized by price trending above key short-term, medium-term, and long-term moving averages. So, if we’re breaking below those long-term moving averages, it’s not a bullish indication; we’re likely 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, rebounding quickly and maintaining its upward trend even after facing challenges.
Franzen is also looking at the bigger picture. He thinks that Bitcoin could reach at least $175,000 during this market cycle, using a method called the Fibonacci extension. He’s been sticking to this target for a while and believes that if Bitcoin hits this level, other major cryptocurrencies like Ethereum and Solana could also see big gains.
