Bitcoin Yet To Fulfill Bull Market ‘Requirement’
Despite what some think, the Bitcoin (BTC) rally of 2017 wasn’t without its hitches. Over the course of the monumental year, during which BTC rose from irrelevance at $1,000 to the world’s hottest asset at $20,000, the cryptocurrency market was struck with crazy bouts of volatility. On some days, Bitcoin gained dozens of percent; on others, BTC stumbled, falling as a result of pure irrationality or bad news — namely China looking to ban cryptocurrency operations.
This, according to Twitter analyst TraderX0, resulted in BTC touching its 100-day exponential moving average (EMA) seven times during the last bull run. This continual support along a single technical trend is what defined 2017’s trend. The thing is, this time around, Bitcoin has yet to even flirt with the 100-day exponential moving average.
In fact, as of the time of writing this, BTC has not crossed paths with the key level since late-March, prior to Bitcoin running past $5,000, $6,000, and $8,000 in rapid succession. This means that it has been almost two and a half months that Bitcoin hasn’t seen that level. If historical action is of any current relevance, the cryptocurrency could soon begin to fall further, specifically to test the EMA to confirm the ongoing bull run.
And interestingly, analysts expect a drawdown. On Twitter, legendary cryptocurrency investor Trace Mayer recently explained that he expects for Bitcoin to undergo a “gentle retreat” to anywhere from $6,500 to $7,500. His peer, Adamant Capital partner Tuur Demeester, echoed the analysis, writing in a note that his firm’s indicators now read “greed” after “capitulation”.
Using this information, Demeester remarked that a 2012-esque correction could be experienced, during which BTC may fall to the range of “between $6,800 and $7,680”, which is a 27% to 44% retrace of the upside rally.
Dips Gives Investors a Chance to Accumulate
While some are entirely fearful for a drawdown, especially considering that Bitcoin is emerging from a very vulnerable state, some have noted that pullbacks present a massive buying opportunity for long-term investors. Level’s Josh Rager reminded investors that every time Bitcoin saw a 30%+ pullback in the previous uptrend, the average gain was around 153% in the months that followed. So, if investors time the dip right, they may be able to make some hefty profits in the weeks and months to come.
Others have also said that a drawdown would be, oddly enough, healthy. In a recent tweet, popular commentator Moon Overlord recently hinted that a drawdown of around 30% to 40% would actually be sustainable, in that it would bring Bitcoin down to the high-$5,000s and low-$6,000s to set a strong base for the upcoming bull market.
- Source: First Appeared Here
- Published Time: 2019-06-09 07:30:30
The views and opinions expressed in the article Bitcoin (BTC) Likely Overextended, Could Fall to Low-$7,000s do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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