Once again, bears have managed to wrest control of the crypto market from bulls, plunging Bitcoin (BTC) to $6,600 earlier today. This comes after Bitcoin bulls were afforded a glimmer of hope as the cryptocurrency jumped 8% from the Friday low of $7,400.
While the crypto is now trading at its lowest price since May, some analysts believe that BTC is still showing signs that it is poised for growth. Crazy as this sounds, there is a confluence of positive technical analysis to back this sentiment.
Why Bitcoin is Still Bullish
Marcel Burger, the head of a crypto investment boutique based in the Netherlands, recently noted that Bitcoin’s one-week chart is still showing signs of strength, despite the absolutely brutal 20% drop seen over the past week.
He noted that BTC’s one-week candles are currently painting a massive bull flag, marked by parallel lower highs and lower lows. If this textbook pattern plays out in full, the cryptocurrency will continue higher into the start of 2020, potentially back into the five-figures range, after a strong breakout to the upside.
That’s not all. Burger continued that Bitcoin remains just below the key 0.618 Fibonacci Retracement level, which some analysts call the “golden pocket” of support. If the cryptocurrency manages to flip that level into a support level, it would suggest that upside could be had in the weeks and months that followed.
It isn’t only Burger that believes a bounce could be had. Popular trader Dave the Wave, who notably called the drop to $6,700 at least four months ago, said that Bitcoin is currently trading extremely oversold according to the one-day chart on Bitstamp. Also, BTC is at the bottom of a medium-term channel that it has been trading in since June earlier this year. This confluence, he writes, means that the cryptocurrency is prime to see a price bounce, one that his chart seemingly says will bring BTC towards the $8,000s.
$5,000 First, Then Moon?
While a short-term bounce seems entirely possible, especially considering what was laid out above, many think that a collapse to lower levels than $6,600 is entirely plausible over the next few weeks.
Per previous reports from NewsBTC, an analyst going by Mac remarked that $5,100 will be the ultimate bottom of this recent downtrend because there exists a key confluence of support levels at that level: the double-month volume-weighted average price, a “price inefficiency fill” level, and the 200-week moving average.
This corroborates a chart from Velvet, an analyst who called the recent drop from $8,000 to $6,700 over a week ago. The trader’s below analysis implies that Bitcoin will bottom somewhere in the $5,000s or $6,000s.