Bitcoin Rallies Off Bottom, Should We Be Excited?
As detailed by this outlet, Bitcoin (BTC) rallied hard off a local bottom of $9,100 just the other day. In fact, within the span of two hours, the crypto asset gained around 10%, moving higher in a move that even bulls didn’t expect.
Despite this strong move higher, which caught many traders with their pants down — leading to a mass of liquidation events — one analyst notes that it may be too early to flip bullish once again. In a recent tweet, Filb Filb, noted that with there being no higher highs, no higher lowers, “over-exuberance” in the Bitcoin markets, death crosses in the moving averages on the four-hour chart, and loads of key resistances in and around $10,800 and $11,000, he isn’t getting “excited on BTC yet”.
What’s more, a Twitter poll from Filb suggests that a good majority of respondents, most of which are presumably cryptocurrency holders or traders, are bullish. In fact, out of the 2,000 surveyed, around 70% of those that gave valid responses were bullish. With this nascent market often being subject to contrarian indicators, meaning that an overall bullish market often leads to downturns, this buy-leaning environment may imply a sell-off may be on the horizon.
There may be one redeeming grace for bulls though. As industry analytics provider Skew notes, Tether’s market capitalization has just surmounted $4 billion. If the correlation between the number of USDT in circulation and the Bitcoin price continues, BTC could rally to at least the $12,000 range.
Buy The Dip
So sure, analysts are divided over what comes next. But, there seems to be an overarching thought process here: dips are for buying.
As Hodlnaut, a prominent Lightning Network proponent and one of the first individuals to be served by Bitcoin Satoshi Vision’s Craig Wright, notes that just nine days ago Bitcoin was trading at $13,000 — at least 20% higher than current levels. The thing is, then, a Congressman had not called Bitcoin and the whole decentralist movement an “unstoppable force” in front of Congress and on CNBC’s “Squawk Box”, which has been defined as commentators on Twitter as one of the most powerful statements in supports of cryptocurrencies since their inception.
The fact that Bitcoin is now trading at a lower price than it was at prior to this statement may, in some investors’ eyes, imply a strong buying opportunity.
From a purely technical and historical standpoint, the return to the $9,000 to $10,000 region is an optimal point to buy in, barring that BTC somehow falls out of bull market territory (arguably sub-$6,000). As Josh Rager noted in a series of tweets published earlier this year, previous bulls runs saw Bitcoin often stumble by over 30%. But what followed were rallies of 150% on average, meaning that these levels may provide a strong accumulation point for medium-term trades.
(This is not financial advice. Please do your own research before utilizing any of the strategies or investing in any of the crypto assets mentioned in this article)
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