Price action is not linear so any movements in either direction will come in stages. Bitcoin’s two day slide of over a thousand dollars may not be over yet, but at the moment BTC appears to be taking a breather.
A number of scenarios could be on the cards for Bitcoin’s next move. Over the past 24 hours it has fallen from $8,000 to an intraday low just above $7,500 before starting to move back upwards again. The weekly picture is not so pretty as BTC is down 8.5 percent from its price levels this time last Wednesday.
Zooming out to the monthly view looks much more bullish with a 36 percent gain over the past 30 days. So where to next for Bitcoin? Traders and analysts have been doing the charts again and one of the more popular, Josh Rager, has suggested that there could be a short term bullish scenario;
“If Bitcoin wants to give short term relief, it can likely push up to retest prior resistance and mid-line of the channel before another move lower. You have to map out multiple scenarios and be ready for each (bullish and bearish),”
$BTC – Short term bullish scenario
If Bitcoin wants to give short term relief, it can likely push up to retest prior resistance and mid-line of the channel before another move lower
You have to map out multiple scenarios and be ready for each (bullish and bearish) pic.twitter.com/3D1StPLW63
This move would take BTC back to support turned resistance at just below $8k. This appears to be what is panning out during the morning’s Asian trading session which has seen Bitcoin push back to $7,900 over the past few hours.
He added that it could also be bouncing off support making lower highs and a descending triangle which could lead to a drop below $7,600 again soon;
“$BTC might be playing a bouncing ball game at support. Lower highs near support will give you fair warning before a likely break below $7600s,”
$BTC….. might be playing a bouncing ball game at support
Lower highs near support will give you fair warning before a likely break below $7600s pic.twitter.com/5x5RxKFH2M
When asked about an uber bearish scenario and a possible dump below December’s low of $3,200 he was confident that $5,500 would be the lowest it will go this time around.
Buy The Dip
The message coming from experienced traders is that corrections are natural and buying the dip is a good way forward. Many longer term technical signals have turned bullish indicating that this bull run is real. That is not to say that Bitcoin will not collapse below $5k again, just that the scenario is very unlikely looking at its current position.
Full time trader going by the twitter handle ‘The Crypto Dog’ pointed out “There is no doubt that $crypto is now experiencing a correction in a bull market, not the end of a relief bounce in a bear market.”
So far the correction for Bitcoin has been around 12 percent which is a long way off the 30 percent that it corrected by eight times during the last major uptrend. There could be more pain before the gain for BTC.