How low can Bitcoin drop?

What my brother and I are watching.

The “sell in May and go away” has usually been right on the money.

We’ve been hovering between 60k and 62k recently, and the question a lot of people are asking is whether June is going to push prices even lower. Maybe down toward 58k or further. It’s a fair thing to wonder about, and my brother Philip and I have been talking about it a lot over the past few days.

Philip and I do a decent amount of technical analysis together when it comes to Bitcoin charts. Nothing complicated, just tracking patterns and comparing what’s happening now to what we’ve seen in the past. And historically, June has been a rough month for Bitcoin.

Both 2018 and 2022 we saw meaningful drops during this period, and that’s not a coincidence we want to ignore. So will the pattern repeat itself this cycle? Nobody knows that for certain but it’s worth taking a look at.

Here’s where things get interesting though. Even if Bitcoin does sweep lower from here around 50k or somewhere in that range, these current prices are already what I’d consider a fire sale. Think about it, if you bought at these current levels and Bitcoin returned to its all time high of 126k, you’d be sitting on roughly 110% gains. That’s not some fantasy math, it’s a fact.

The drop from here to 50k, if it even happens, isn’t dramatic enough to justify sitting on the sidelines with no position. That’s the part people tend to get caught on, they wait for the perfect entry and end up missing most of the move. It’s like waiting for a house to get just a bit cheaper before buying in a neighborhood you know is going to grow. Sometimes the price dips a bit more, sometimes it doesn’t, but waiting too long has its own risks.

I’ve been dollar cost averaging every week and these prices have me feeling pretty good about where things are headed. I’m also making sure I’ve got some capital left over just in case we do see another leg down. That strategy between staying invested and keeping dry powder ready is something I’ve talked about before and it’s one of the most useful habits I’ve built over the years.

As for the critics calling Bitcoin dead, well, this is the same song they sing every bear market. It stopped fazing me a long time ago and it shouldn’t phase you either.

Now for the bigger picture. Philip and I wouldn’t be surprised if Bitcoin works its way back up toward the 70k to 80k range during the summer as some FOMO briefly kicks back in. That being said, a flush out of retail investors one more time for a proper bottom around September or October isn’t out of the question. That’s a pattern we’ve seen play out in 2018 and 2022, and it’s worth keeping in mind as you plan your next move.

It may also not play out that way this cycle. Which is exactly why accumulating at these levels makes sense regardless of which scenario unfolds. At least that way you still have a position with the option of lowering your average if another bottom does play out.

Of course, none of this is financial advice. It’s just what Philip and I are watching based on our own research and observations.

We’ll keep tracking Bitcoin’s possible moves and sharing what we’re seeing along the way.

These periods are annoying, nobody likes watching red candles. But this is usually where the money gets made, not during the euphoric part when everyone suddenly becomes a genius.