Analysts Bearish on Bitcoin
Bitcoin (BTC) hasn’t been doing all too hot as of late. After skyrocketing higher by over 100% from early-April to late-May, the cryptocurrency has begun to taper off, with bulls clearly losing momentum over the past week. In fact, BTC hit $7,450 last week just days after rubbing shoulders with $9,100. This represented an approximately 20% decline in a few days’ time.
While Bitcoin has since recovered slightly, with bulls wresting the asset to $7,900, some are fearful that a move lower may soon come to fruition. Analyst CryptoBirb remarked that BTC isn’t in a good place right now, having broken below a key medium-term parabolic trend (the one that supported the run from $5,000 to $9,000), a steep short-term uptrend, and the ever-important $8,000 level.
This isn’t the only harrowing sign. Analyst Teddy recently pointed out that the “daily [chart] is starting to look increasingly weaker” for the leading digital asset. More specifically, Bitcoin has been struggling to make a move on $8,000, let alone $8,200; and the asset has also struggled to close above the 21-day exponential moving average (EMA), a key trend line.
You see a theme here? Well, if you haven’t, let me point it out. It’s $8,000. This level is what many believes is ‘make or break’ for bulls, especially on the short to the medium time span. In fact, analyst Josh Rager of Level recently tweeted that if Bitcoin closes the weekly candle (Sunday) under $8,000, a move to the downside would be most likely.
So where could Bitcoin head from here? According to Birb, as long as Bitcoin is under the $8,200 and $9,200 levels, he would inclined to be bearish, and would actually expect a medium time frame drawdown to the mid-$5,000 range. He isn’t the first to have looked to this region.
Trader Walter Wyckoff noted that if BTC is mirroring price action in 2015 — during which this market went parabolic, saw a brief retrace, and then continued higher — it could fall to the low-$6,000s, or even the high-$5,000s.
Tuur Deemester of Adamant Capital made a similar proposal. In a recent note, he explained that Bitcoin could see a larger retrace from here, which would bring BTC to $5,600. The reason why this could occur is that in 2015, there was a large “upward move” in the Relative Unrealized P&L indicator, which coincided with a peak in capital flight from China, then a 70% retrace of the rally. With the conditions seemingly being the same — it is believed the U.S.-China trade war has catalyzed Bitcoin’s strong price action — this sequence of events is surely on the table.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash