Bitcoin Could Soon Falter
Somehow, someway, Bitcoin (BTC) has managed to keep up the bullish momentum for upwards of three months now. The short-term would suggest that this may continue. As analyst Dave The Wave recently pointed out, the daily chart for the leading cryptocurrency currently has a “stunning technical set up.”
What Dave seems to be referring to is the fact that BTC is currently trading in a triangle pattern that exhibits a clear uptrend. What’s more, a medium-term parabola has continued to hold, and suggests that BTC could move to $9,000 and beyond by early-June.
Indeed, many analysts believe that BTC could move higher in the short-term, looking to triangles to back their calls. As Ethereum World News reported previously, analyst Galaxy recently pointed out that BTC is currently trading in a symmetrical triangle pattern, which studies state has a 60% chance of leading to a price breakout. If this breakout occurs, the analyst suggests that a move to $10,000. A breakout could occur any time within the next three weeks. Crypto Rand has corroborates this call, also noting that the triangle formation suggests a breakout to the $10,000 region, as there exists the next set of horizontal resistances for Bitcoin.
But as Dave points out, just because Bitcoin’s short-term chart is bullish doesn’t mean that it’s exactly poised to move higher. The analyst reminds us that long-term chart looks a tad precarious right now. More specifically, BTC may be overbought, as suggested by the negative MACD reading on the daily, BTC encountering resistance at $8,000, and the current consolidation pattern. And thus, Dave concludes:
The difficulty is the longer term charts show BTC currently in over-bought territory. The longer-term trumps the shorter term imo.
And interestingly, many agree with his sentiment that a drawdown could be inbound. Firstly, Bitcoin has yet to break above the key $8,400 resistance level for about two weeks now, confirming that the current bullish momentum isn’t strong enough right now. The technicals may tell a similar story.
Bravado’s Bitcoin Jack notes that Bitcoin recently reached its “FAPFAP” bear market average price level, which Jack claims signals an impending reversal, as he saw similar patterns in gold, the S&P 500, and Bitcoin in its history. What’s more, BTC is currently trading at the monthly and weekly resistances from July 2018, which the leading cryptocurrency was rejected from when it attempted to break out.
He goes on to draw attention to the fact that parabolic advances, like the one that digital assets across the board just experienced, always result in a 60% to 70% retracement, which would result in BTC heading back to $5,000 or $6,000. And, to top that all off, Jack bluntly points out that longs are clearly consolidating on BitMEX; volume has slowed, despite the recent rebound; the Bitcoin-backed exchange-traded funds are off the table; and altseason, especially for an asset like Ethereum, seems to be right on the horizon.
Title Image Courtesy of Icons8 Team Via Unsplash