Bitcoin’s recent price movements lack bullish momentum, and macroeconomist Henrik Zeberg suggests that the long-term outlook may also be weakening.
In a post on X, Henrik Zeberg offered a strongly negative view of the market’s current dynamics, concluding that Bitcoin is no longer acting like an asset in a healthy growth phase. Instead, he characterized Bitcoin as approaching a critical peak and cautioned that the current market structure poses a heightened risk for a significant downturn once that peak is reached.
Bitcoin’s Expanding Diagonal Indicates Price Peak
Zeberg’s analysis of Bitcoin relies on the expanding diagonal formation seen in the monthly candlestick chart for Bitcoin. This long-term pattern, evolving since Bitcoin’s inception, illustrates increasing volatility with prices hitting higher highs and lower lows across a widening range.
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His chart suggests that Bitcoin is nearing the completion of this structure, expected to show signs of exhaustion. Zeberg labels the current zone as a topping zone, indicating that any further upward movement will likely be unstable, even if prices continue to rise.
Interestingly, his chart predicts a final surge that could form a blow-off top, potentially pushing Bitcoin into the mid-$150,000 range. However, within this context, that last spike is indicative of overconfidence typical of late cycle phases. Expanding diagonals often end abruptly, and Zeberg believes that this current pattern resembles the moments of peak optimism just before a downturn.
From Euphoria To Significant Crash Potential
Zeberg’s projections regarding downside targets are among his most contentious. He posits that once Bitcoin completes its final euphoric rally above $150,000, it may face a collapse of a magnitude that many current Bitcoin investors deem unimaginable.
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He compared this trend to the dot-com bubble, during which the Nasdaq saw a decline of over 80%. He pointed out that Bitcoin has historically magnified both upward and downward movements. Based on this reasoning, Zeberg forecasts a scenario in which a broader AI and cryptocurrency bubble implodes, potentially causing Bitcoin to plummet by around 97% to 98% from its eventual peak.
This would set a technical minimum target between $3,000 and $4,000, with the chance of even greater declines. While the anticipated final rally may be impressive, enduring the subsequent crash could be devastating for those who are unprepared.
Zeberg also pointed out momentum indicators he believes confirm the bearish outlook. Bitcoin is currently showing what he describes as significant bearish divergence on the monthly chart. This occurs when prices keep rising, but momentum indicators, like the RSI, fail to validate those highs.
Another important gauge is the monthly MACD, which is nearing or may already be showing a bearish crossover on the long-term chart.
Featured image from Pixabay, chart from Tradingview.com
