Source: PaxForex Premium Analytics Portal, Fundamental Insight

Many people know that a correction of more than 20% is nothing new for bitcoin. Throughout history, it has experienced more significant corrections than the current one.

Those who have lived long enough to remember other collapses of more than 50% in less than a month can attest that this is just another bump in the road. Since bitcoin's inception, there have been roughly seven corrections that have cut the price in half. After each of these corrections, bitcoin has recovered - each time.

In April 2013, bitcoin retreated 83% in a short period of time. It lost another 50% when China initially banned bitcoin in December of that year.

2018 has been extremely unfavorable. Although bitcoin hit an all-time high of nearly $20,000 in December 2017, by December 2018 it was trading at just $3,000.

More recent investors may remember the March 2020 crash, when bitcoin lost 50% in just a couple of days. The same thing happened in May 2021.

And yet today, the markets are in disarray as bitcoin is down more than 20% in the last week and more than 50% from its all-time high in November 2021.

Sometimes knowing where bitcoin has been is enough to be sure of where it will go. There are some useful stats and charts that allow us to assess bitcoin's current position in perspective and shed some light on where we might be headed.

The realized price is the value of all coins purchased divided by the amount of bitcoin in circulation. The realized price of bitcoin has served as a consistent support line for bitcoin for most of its history. The realized price is useful for evaluating bitcoin's future actions because it represents the average price at which holders bought their bitcoins. History shows that as the actual price approaches the realization price, investors tend to buy more because they do not want to sell below the value at which they bought.

The real price of bitcoin has only fallen below the sale price three times in history. Currently, bitcoin's real price is around $29,000. The sale price is about $24,000.

Probably the most reliable and simple chart to assess bitcoin's current position is the 200-week Moving Average (WMA). Bitcoin usually bounces back quickly from the 200-week Moving Average. Bitcoin has only fallen below the 200-week moving average twice in history, and that for a short period of time. It has never stayed below the 200 WMA for more than a month.

Bitcoin's 200 WMA is currently around $22,000. At an actual price of around $29,000, it could certainly go lower or even trade sideways for a while, but the worst damage is likely behind it.

As the old saying goes, all models are wrong, but some are useful. There is no chart that will predict exactly what bitcoin will do next. However, some statistics can give an idea of the current situation in which bitcoin finds itself.

Traditionally, these two indicators have been a great support for the bitcoin price. The downside risk still exists. But investors should not try to guess market timing. The difference between the 200 WMA or selling price and the actual bitcoin price is minuscule. Ignore the noise and consider investing in those historically valuable prices. In hindsight, these were some of the best times to buy bitcoin in the long run.

As long as the price is below 34300.00, follow the recommendations below:

Time frame: D1

As long as the price is below 34300.00, follow the recommendations below:

• Recommendation: Short position
• Entry point: 29875.00
• Take Profit 1: 25000.00
• Take profit 2: 23000.00

Alternative scenario:

If the level of 34300.00 is broken-out, follow the recommendations below:

• Time frame: D1
• Recommendation: long position
• Entry point: 34300.00
• Take Profit 1: 41800.00
• Take Profit 2: 45600.00