Bitcoin Retraces to Key Support Level; Will Bulls Step Up?
Bitcoin has been caught within a bout of consolidation over the past several days, with BTC trading within a wide range between roughly $7,800 and $8,800 and it is currently trading directly within the middle of this aforementioned range.
It is important to note that analysts are now claiming that BTC is sitting at a critical support level, and a failure for its bulls to holds its price above this level could cause a period of capitulation that sends it reeling significantly lower.
Bitcoin Consolidates After Nearing Critical Support Level
At the time of writing, Bitcoin is trading down nominally at its current price of $8,400, and it has been unable to garner enough buying pressure in recent times to invalidate its recent bearishness.
It is important to note that BTC’s bulls did attempt to propel the cryptocurrency higher yesterday, but it faced a strong rejection at $8,900 that subsequently pushed its price down to its current levels.
In the near-term it remains unclear as to where the cryptocurrency will head next, but one prominent analyst is explaining that BTC is currently forming a strikingly similar pattern to that which was formed in early 2019, which could mean that this drop will be proceeded by a large bull run.
“$BTC fractals: some similarity b/t daily chart in Q1 2019 to 4h chart now. Conclusion of consolidation may again align w/CME contract rollover,” Josh Olszewicz, a popular crypto analyst, explained in a recent tweet.
In order for this bullish fractal to be validated, however, it is imperative that Bitcoin’s bulls maintain the cryptocurrency’s price above its near-term support level that exists between $8,300 and $8,400, as a sustained drop below this region could invalidate any bullishness that the cryptocurrency is currently expressing.
DonAlt, a popular cryptocurrency analyst on Twitter, has this level marked on his latest chart as BTC’s near-term support level, but it is important to note that he still believes it will break below this level and drop until it finds support in the lower-$7,000 region.
“$BTC daily update: Took out the range high. Even if I take any HTF bias out of the analysis that makes me expect the range low to be hit. The fact that this range developed after a massive breakdown is just a bonus. For me to turn bullish we’d have to trade back above 9.5k,” he said while pointing to the below chart.
Took out the range high. Even if I take any HTF bias out of the analysis that makes me expect the range low to be hit. The fact that this range developed after a massive breakdown is just a bonus. For me to turn bullish we'd have to trade back above 9.5k. pic.twitter.com/QysoaPGTgy
How Bitcoin responds to its near-term support will likely provide insight into where it will head next, as any further bullishness in the coming days and weeks could validate the bullish aforementioned fractal.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.