Why a 30% Bitcoin price crash should not catch you off-guard right now

The Bitcoin (BTC) price rally halted the moment Joe Biden was announced as the projected winner of the 2020 presidential election during the weekend with price dropping from $15,500 to $14,400.

However, Bitcoin is still continuously showing strength as it’s once again facing the final resistance zone at $16,000.

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This final resistance zone is the last major hurdle before a potential run at a new all-time high. However, a pullback is becoming increasingly likely with the Fear & Greed Index currently at the same levels similar to the peak high in the summer of 2019.

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The weekly level at $16K likely big resistance

BTC/USD 1-week chart. Source: TradingView

The Bitcoin’s weekly chart shows the resistance zone at $16,000 as the final resistance zone before a new all-time high can be tested.

The weekly chart also shows support levels if the price of Bitcoin starts to correct. A correction would be relatively healthy is it flips previous resistance levels to become new support.

If a correction occurs, the weekly level of around $11,600-12,000 should be watched as a potential support zone. Such a correction would mean a dropdown of approximately 30% for Bitcoin’s price. A correction of 30% is quite normal as this happened a few times during the previous bull cycle in 2017.

‘Extreme greed’ similar to summer 2019

The Crypto Fear & Greed Index is a useful indicator to measure the current market sentiment. In extremely depressed periods, the index uses the color red to mark the overall sentiment.