Bitcoin: After Plummeting Over 20%, Analysts Believe a Bounce at $9,100 Would Be “Mega Bullish”
Bitcoin bulls were gravely disappointed yesterday after the cryptocurrency failed to maintain its upwards momentum and set a local top at approximately $13,800, which subsequently led the cryptocurrency to plunge over 20% to lows within the mid-$10,000 region.
This recent volatility has led many analysts and investors alike to question what may have caused it, and one prominent analyst is now claiming that a strong bounce at $9,100 is key for Bitcoin to maintain its incredibly bullish momentum.
Bitcoin Plummets Towards $10,000, But Macro View Looks Bullish
At the time of writing, Bitcoin is trading down nearly 18% at its current price of $10,680, which is a significant drop from its recently established highs of just below $14,000.
Importantly, BTC is still in a clear uptrend over a longer time period, as it has been able to post a strong surge from its one-month lows of roughly $7,700.
Bitcoin’s recent parabolic surge, which ultimately resulted in a massive drop, signals that the cryptocurrency is not yet ready to continue its journey back towards its all-time-highs and may signal that further consolidation is needed in order for the crypto’s bulls to build their strength.
The recent plummet has led many investors who were exuberantly bullish yesterday to flip bearish today, but this bearish sentiment may not last long, as BTC may post a significant bounce in the $9,000 region, which would be “mega bullish,” according to one prominent analyst.
“$BTC #Bitcoin Bounce off $9100 would reasonable, and mega bullish,” Big Cheds, a popular crypto analyst on Twitter, said in a recent tweet.
What Could Be Causing This Massive Volatility?
As for what could be behind the recent volatility in the crypto markets, Michael Moro, the CEO of Genesis Global Trading, said in a recent interview with CNBC that leverage trading is the most likely suspect.
“The presence of leverage exacerbates the moves in both directions and affects the speed dramatically. Of course bitcoin has a history of doing this (both upward and downward), but it’s hard to call the magnitude of the move healthy,” he noted.
Furthermore, Moro also noted that Bitcoin’s massive upwards swing over the past week was “too much too fast,” which is what led to this subsequent price crash.
“Even the most optimistic crypto bulls would tell you that a 50%+ move in a week is too much too fast,” Moro added.
Although this recent volatility has made it incredibly unclear as to where Bitcoin is heading next, it is important to note that it is still in a firm uptrend, and unless it continues dropping significantly further, bulls can likely maintain their control.