Crypto Analyst Still Bullish After Sunday’s Sudden Bitcoin Drawdown
Bitcoin Looking Somewhat Healthy
After a near-relentless rally that went on for ten days, Bitcoin (BTC) saw a sudden pullback on Sunday. In a brief period of time, BTC fell from $4,200, where it had topped from a short-term point of view, to $3,800, a level it failed to surmount for weeks on end. Yet, some traders have kept their heads high, accentuating that they are still sure that a further move to the upside is inbound.
Financial Survivalism, an insurance agent turned full-time trader, recently took to Trading View and Twitter to explain his thoughts on the current state of cryptocurrencies. Survivalism noted that while the leading crypto asset didn’t close above its 200-week exponential moving average (EMA), a key line of resistance that has held since November 2018, he is still leaning bullish.
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He explained that there was a daily “bearish engulfing” candle, which purportedly leads to a short-term reversal “79% of the time according to Thomas Bulkowski.” The analyst added that after reading the moving averages, Average Directional Index, TD Sequential, Ichimoku Cloud, among an array of other technicals, he should keep his bullish disposition. Survivalism elaborated:
The Bollinger Band MA was in confluence and didn’t even quite get tested. The Ichimoku Cloud is fully bullish with the Tenkan-Sen above the Kijun-Sen, the price above the cloud and a bullish kumo twist.
Not The Only Bull On The Block
Interestingly, Survivalism isn’t the only commentator touting some semblance of hope after Sunday’s rapid move lower.
Magic Poop Cannon, an oddly-named technical analyst, noted that while Sunday’s downturn had some cynics claiming that Bitcoin’s time was up, forecasting a doomsday scenario may be a tad irresponsible. Magic noted that while $400 drop is bearish in and of itself, especially due to crypto’s fragility, investors should look to where BTC recently found a bottom — “exactly” on the 50 EMA. Interestingly, Survivalism also drew attention to this mark.
The fact that BTC held strong at that level led Magic to the conclusion that BTC returning to test such a “critical resistance level” is natural, adding that the cryptocurrency’s 50 EMA will be an essential point to watch in the coming days. The Tom Lee-endorsed analyst added that from a short-term perspective, citing the RSI, BTC has some room to move higher, due to the neutral reading on the strength indicator.
Bitcoin Jack of Bravado has also touted optimism. The trader explained that the sudden reversal is just a “perfect shakeout,” rather than a sign that the end is nigh for this market. He added that there is a possibility for BTC to bounce off the upper bound of a declining pennant to revisit previous support levels, many of which are dramatically higher than current levels. Jack even concluded:
Failure of tapping [$4,200] high followed by sharp move down shows likelyhood whales are looking for liquidity provided by sellers, further build their position to dump in the 5-6k range.
As of the time of writing, BTC is valued at $3,836 and is down 8% in the past 24 hours. Most altcoins are faring worse.