Bitcoin In Price Lull at $9,500, Yet Analysts Are Expecting a Breakout 14

Bitcoin In Price Lull at $9,500, Yet Analysts Are Expecting a Breakout

Analysts Expect Bitcoin Bounce

There is no doubt that Bitcoin is in a price lull. As of the time of writing this, the cryptocurrency is trading at $9,600, having fallen by 6% in the past week and 0.1% in the past 24 hours. This short-term downtrend in the cryptocurrency market has purportedly resulted in Bitcoin’s lowest trading volume day since April 16th, according to Cantering Clark.

For those unaware, on April 16th, Bitcoin was trading at around half of the current price, $5,000, having just surged by $1,000 in a day’s time on the 2nd, which is a move that kicked off the bull run. This lack of trading activity seems to stem from a number of factors: it being a holiday weekend in the United States, there being little fundamental news to catalyze buying or selling pressure, the CME’s Bitcoin monthly futures contracts recently expiring, and BitMEX being under pressure from regulators,

Per Cantering Clark, a prominent trader, Bitcoin’s “obviously weak” price structure, which has only been underscored by the lack of volume and the directionless movement, has him suspicious. Citing his experience eyeing charts, he remarked that “many times Bitcoin has been leveled while looking strong, and has knocked everyone off their feet when it appeared weakest.”

Indeed, back in June, when Bitcoin was consolidating in the $9,000 range, many analysts were eyeing a pullback to at least $7,000, but then a surge to $14,000 took place. And, when every analyst and their mom was calling for $2,000 in December 2018, BTC rapidly pumped, hitting $4,000 in a bear market recovery.

While the analyst didn’t explicitly state if he expects for Bitcoin to soon resume his uptrend, the technicals and fundamentals are supportive of a cryptocurrency bounce.

Crypto Michael, a full-time trader at the Amsterdam Stock Exchange, recently remarked that the 21-week exponential moving average acted as support throughout the last bull market after BTC tested it January 2016. Indeed, as he depicts in his chart below, Bitcoin had a tendency to fall by 33% to 39% to hit the moving average, then rocket back to fresh all-time highs in the coming weeks.

Right now, the cryptocurrency is around $500 away from the moving average, which is currently 37% lower than BTC local peak of $14,000. History repeating would see BTC fall to flirt with $9,000, then rebound into the end of 2020 and the subsequent block reward reduction.

And, to put a cherry on the proverbial cryptocurrency cake, analyst Filb Filb has stated that Bitcoin’s four-hour chart is bullish, noting that the four-hour on-balance volume (OBV) indicator has trended higher, despite a drawn-out downtrend in the price of BTC. This bullish divergence is purportedly the first on Bitcoin’s four-hour chart since the $3,350 price bottom seen in December.

Also, the negative peaks in the four-hour Moving Average Convergence Divergence (MACD) have become increasingly higher, implying that bears are losing steam.

Photo by Thought Catalog on Unsplash