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Bitcoin Bulls Remain in Full Control as Long as They Defend a Few Key Levels

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  • Bitcoin has witnessed intense inflows of selling pressure throughout the past several hours on news of Bithumb’s Korean offices being “raided” by authorities
  • Although it remains unclear as to why the raid took place – or why Bitcoin investors should care – it instantly led fear to spread throughout the industry
  • This created shockwaves that caused many other digital assets to plunge lower as well, with Ethereum at one point dropping from highs of $480 to lows of $419
  • Analysts are noting that, from a technical perspective, bulls still remain in full control of BTC, as it has yet to post a break beneath any crucial levels

It’s starting to feel more like 2017 by the day, with news surrounding Bithumb’s Korean offices being raided by police creating a sense of immense fear amongst Bitcoin investors.

This caused Bitcoin to erase all of the gains that it incurred yesterday and sent the crypto reeling down to lows of $11,300.

At these lows, it was able to find significant support that both slowed its ascent and catalyzed a sharp rebound.

Although this rebound is now stalling, analysts believe that there’s a mounting chance that further upside is imminent in the near-term.

Bitcoin Plunges as Investors Grow Concerned About South Korean Crypto Crackdown 

It’s no secret that news about South Korea cracking down on ICOs and other speculative aspects of the crypto market in 2017 and early-2018 helped catalyze multiple strong selloffs.

This type of news-based selling appears to be returning to the market, as news of Bithumb’s offices being raided sent Bitcoin spiraling lower today.

At the time of writing, Bitcoin is trading down just under 4% at its current price of $11,445. This marks a notable decline from recent highs of $12,200 that were set at the peak of yesterday’s upswing.

Analyst: Bulls Still Remain in Control of BTC 

Despite the overt weakness that the cryptocurrency is currently expressing, one analyst is noting that bulls still remain in control of Bitcoin.

While speaking about this, he explained that a close above $11,770 at the end of the day would be extremely bullish.

“BTC: Nothing lost for the bulls yet, close above $11770 and I’d expect mega moon. Close significantly below and sells into the $11700 area become very attractive. Lose $11k and it’s macro pullback time, as long as it holds assume we’re gonna go further up.”

Image Courtesy of DonAlt. Chart via TradingView.

Unless bears break the support that exists between $11,000 and $11,300, BTC still remains within its long-held trading range.

Featured image from Unsplash.
Charts from TradingView.





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3 things traders are saying about Bitcoin and the state of the bull market

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Bitcoin’s (BTC) dip below $29,000 on June 22 rocked the markets a handful of analysts to call for a potential drop below $20,000. 

Many traders on crypto Twitter were focused on the formation of a death cross on the Bitcoin chart as an omen for another potential drop in the price but analysts with a more contrarian point of view look at this chart pattern as a signal that it is time to buy the dip. 

Three reasons why some traders still see a bull case for Bitcoin include the appearance of the “spring” stage of the Wyckoff accumulation model, steady buying by long-term holders and the formation of a bear trap at the golden ratio that is similar to moves seen during previous bull runs.

The Wyckoff model says spring has arrived

The Wyckoff accumulation model has been all the rage amongst cryptocurrency analysts over the past month as the price action for Bitcoin has been tracking the pattern relatively closely since the May 19 sell-off.

As seen in the tweet above, Bitcoin’s plunge below $29,000 and the subsequent recovery above $32,000 has some analysts suggesting that the “spring test” seen in phase C of the Wyckoff pattern has been fulfilled. This would indicate that the bottom is in for the current correction and now begins the choppy climb higher.

If this turns out to be true, BTC would enter phase D, also known as the “markup phase” where a new uptrend is established and “pullbacks to new support offer buying opportunities” that are often seen as opportunities to buy the dip.

Related: Bitcoin drops below $36K as century-old financial model predicts big BTC crash

In phase D a breakout to new highs is expected as the cycle completes and prepares to potentially begin again once the move higher is exhausted.

Long term holders are still bullish

Another bullish sign cited by analysts is the steady accumulation by long-term holders.

The Bitcoin long-term net holder position shows that investors actually began to reaccumulate back in late April and they began to significantly increase their activity in May as the price fell into the $30,000 to $40,000. On-chain data shows that these investors have continued to buy into the most recent dip.

This activity suggests that more experienced crypto traders are familiar with Bitcoin’s market cycles and view the current range as a good level to open long positions when fear is high and the sentiment is low. 

The biggest rewards go to those who take the risk to buy an asset amid plunging prices and sentiment, and these are the types of situations where the contrarian traders thriv.

A bear trap lurks at the golden ratio

The third scenario some analysts are focusing on suggests that the current price movements have set up a bear trap that echoes a move seen during the last cycle which involves a pullback to the 1.618 golden ratio extension level which will then be followed by a breakout to new highs.

From this perspective, the market is currently in the awareness phase of the four psychological stages of asset bubbles. After the bear trap occurs, Bitcoin will enter the mania phase where widespread media coverage attracts the attention of new market participants who then chase the price to ever-increasing heights “based on the delusion that the asset will keep going up, forever.”

Previous calls for the possibility of Bitcoin reaching a price of $200,000 by the third or fourth quarter of 2021 by veteran trader Peter Brandt, who was far from alone in predicting its value to surpass the $100,000 mark this year, would suggest that the long-expected blow-off top is yet to come.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.