bitcoin

Bitcoin Bounces To $8,100, Yet Analysts See Potential For Healthy Pullback

Avatar Nick Chong 7 months ago

No one expected what Bitcoin (BTC) did in the past 24 hours. According to Messari’s OnChainFX, the leading cryptocurrency is up 9% in the past 24 hours, finding itself at $7,950 after touching $8,100 earlier today. Altcoins have experienced similar gains, with most rising by nearly seven or eight percent.

Related Reading: Bitcoin May Be Gearing Up for a Move to $10,000 as Upwards Momentum Continues

While some have claimed that this move is decidedly bullish, especially considering the context of the seeming Bitstamp manipulation, some are fearful that this is just a precursor to one final drawdown.

Bitcoin Could See A Pullback

Josh Olszewicz, a leading technical analyst that frequently posts articles to Brave New Coin, suggests that the Ichimoku Cloud, a series of technical indicators meant to determine trends and key levels, is saying that Bitcoin is “insanely overbought”.

He goes on to add the Cloud is “calling for $6,150, looking to the fact that one of the indicator’s leading lines, which acts as support in bull runs and resistance in bear trends, sits at that price level. Olszewicz also notes that the Relative Strength Index (RSI) reading on the one-day chart is at 90, which is well overbought, hinting that a move lower may be inbound.

He isn’t the first to have pointed to signs that BTC may soon see a reversal. Bravado’s lead analyst, Bitcoin Jack, recently noted that BTC has yet to break above the $8,400 resistance (signaling a local top), potentially setting the stage for a drawdown to $5,000.

The Other Side Of The Equation

Some, however, have drawn attention to signs that this ongoing move is bullish. Olszewicz notes that according to a textbook chart pattern, the fact that BTC fell for three days, then saw a massive reversal candle to the upside may hint at “bullish continuation”.

What’s more, there isn’t much resistance from current levels, $8,000, to $10,000, giving credence to the theory that if BTC breaks above $8,400, another run-up would just be a matter of time. As Crypto Rand, a well-followed chartist on Twitter, explained on Sunday: “Bitcoin [is] heating up for $10,000”.

Josh Rager, a representative of fledgling crypto exchange Level, explains that this recent rebound confirms that Bitcoin is looking strong. BTC has continued to see higher lows in the current consolidation pattern, preparing the crypto market for a continuation to the upside.

On the side of fundamentals and sentiment, NewsBTC’s Joseph Young has noted that the simple fact that BTC rebounded to $8,000 is a confirmation that many investors are bullish.

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