According to Robert Sluymer, Bitcoin has finally bottomed out. Sluymer, the chief technical strategist at Fundstrat believes the number one cryptocurrency will soon begin to recover. The crypto analyst pointed to international trade tensions and the developing situation in Italy as some of the reasons behind the imminent Bitcoin revival.
$7,000 is Bitcoin’s Bottom Level
Speaking via telephone with CNBC, Sluymer identified $7,000 as the bottom price level for Bitcoin.
When we step back, we see the first phase starting to happen. We think Bitcoin is starting to bottom off some very key support around $7,000 and we think it’s going to start a recovery process here.
According to Sluymer, Bitcoin has declined several times in 2018 but has hardly ever dropped below $7,000. The only exception was at the start of February 2018 when BTC prices plunged to $6,000, its lowest level since November 2017. Towards the end of May, BTC prices fell to $7,054 but didn’t slide lower than the $7,000 threshold. Sluymer believes this is a positive development for the number one cryptocurrency saying:
That’s certainly the first step in a bottoming process – to see some sort of consolidation or a basing taking hold.
If Bitcoin has indeed found a stable bottom price limit, then the next step would be a price rally. In December 2017, BTC prices reached a record high of $19,500. However, 2018 has been a challenging year not just for Bitcoin but the entire cryptocurrency market as well.
Market Indicators Show $7,800 as the Next Price Hurdle
Sluymer points to market indicators like the Relative Strength Index (RSI) as signs that BTC is gaining some momentum in preparation for a rally. Looking at the chart below, Bitcoin’s RSI is currently at 40. Typically, RSI of 30 and above indicate oversold conditions. As a result, Sluymer thinks now is the best time to go long on BTC saying:
We [Fundstrat] think the setup is very attractive here. If you’re short we think you should be very careful and reducing your short exposure. I think if you’re looking to be long this is where you start adding here to your long exposure.
According to Sluymer, $7,800 is the next threshold level for Bitcoin to surpass. Since May 23, BTC hasn’t reached the $7,800 mark. Sluymer is confident that all the indicators point to at least a short-term rally in that direction, saying:
The next thing that has to happen is to see Bitcoin actually rally through the downtrend and we use the 15-day moving average, it’s very simplistic, but it’s a pretty good proxy across most markets. Its 15-day moving average of roughly $7,800 “will be the next hurdle for it to get through.
Do you Bitcoin prices have reached their lowest level? Do you expect the much talked about price rally to begin in June? Keep the conversation going in the comment section below.
Images courtesy of Twitter (@rsluymer) and CNBC.