The crypto markets have incurred overwhelmingly bullish price action over the past several weeks that appears to have confirmed many analyst’s belief that $3,200 truly is a long-term bottom for Bitcoin (BTC). The recent price action has drastically shifted overall market sentiment, and many investors are growing increasingly bullish with each new day.
Despite this shift, one highly-respected analyst laid out what he believes is a realistic “maximum pain scenario” for Bitcoin, explaining that it may surge to above $6,000 before incurring significant selling pressure that pushes it lower.
Bitcoin (BTC) Solidifies Position in $5,300 Range
At the time of writing, Bitcoin is trading up less than 1% at its current price of $5,330, up from 24-hour lows of $5,260.
After incurring some light selling pressure during this past Sunday, Bitcoin has been able to continue climbing higher and appears to have firmly solidified its position in the $5,300 region, just slightly below its historically established resistance level that is exists at $5,400.
Over a one-week period, BTC is up significantly from its lows of $5,020, which were set last Monday. The cryptocurrency is currently trading just a hair below its seven-day highs of roughly $5,360, which were set earlier today.
UB, a popular cryptocurrency analyst on Twitter, shared his thoughts on Bitcoin’s current price action, explaining that yesterday’s small dip could have been just what was needed to spark a small rally that would confirm his bullish sentiment.
“$BTC – I wouldn’t be surprised if yesterday was “The Dip” before testing the local highs. I’d like to see a Daily Close above $5320 to further confirm my bullish argument. If I don’t see that in the next day or two, my bearish arguments will begin to hold more weight,” he explained in a recent tweet.
Will BTC Witness a “Maximum Pain Scenario?”
Although Bitcoin may be on the edge of incurring some significantly bullish momentum, a move higher may be directly followed by a drop back into the lower $4,000 region.
Alex Krüger, an economist who focuses primarily on cryptocurrencies, explained this possibility in a recent tweet, saying that he thinks another drop to $4,000 is the most realistic “maximum pain scenario” for the cryptocurrency.
“Maximum pain scenario for $BTC: – shoot through to $6000 – rest right above $6000, luring longs in – dump back down to $4000s in 2 days – have everyone scream ‘this is The End’ – slowly move back up,” he explained.
Although BTC was just trading at $4,000 a few weeks ago, the question remains as to whether or not the recent price surge and continued upwards momentum will build enough support levels to keep the crypto above the $5,000 price level.