After attempting to push Bitcoin higher after its drop to the mid-$9,000 region earlier this week, the cryptocurrency’s bulls have begun to falter, and BTC is once again nearing its key support level at $10,000.
Analysts are now noting, however, that BTC is quickly nearing the apex of the massive descending triangle that it is currently trading within, and market psychology may point to the possibility of it breaking upwards in the near-future.
Bitcoin Drops to $10,000, But Recent Bearishness May Be Fleeting
At the time of writing, Bitcoin is trading down just over 1% at its current price of $10,065, which marks a slight retrace from its daily highs of just under $10,300.
Earlier this week, Bitcoin posted an incredibly strong bounce after a brief visit to $9,500, which is where the cryptocurrency incurred a significant influx of buying pressure that propelled its price to highs of roughly $10,500.
This bullish reaction to the mid-$9,000 region led many analysts to believe that the cryptocurrency was going to post an extension of its upwards momentum, but its latest drop signals that bulls don’t have quite as much strength as previously thought.
Peter Brandt, a revered analyst who has correctly called multiple Bitcoin movements, explained that market psychology may elucidate how the bearish descending triangle that BTC is currently caught within will resolve, as the markets have a “tendency to do what the most number of market participants least expect.”
“One thing I have learned from 45 years of trading: Markets have a tendency to do what the most number of market participants least expect and don’t want to happen. Descending triangles are most often bearish,” he explained.
One thing I have learned from 45 years of trading:
Markets have a tendency to do what the most number of market participants least expect and don't want to happen.
Although it does remain somewhat unclear as to which direction the markets are going to head as BTC reaches the apex of this triangle, it is clear that it is currently gearing up for a massive movement.
“$BTC – the daily BB’s have not been this tight since April with still room to squeeze #bitcoin,” Big Chonis, a popular crypto analyst on Twitter, explained in a recent tweet.
How Bitcoin reacts to its support level at $10,000 may elucidate which direction Bitcoin is heading in the near-term, as another drop below this support level could spell trouble for the crypto’s bulls.