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Why Bitcoin’s Plunge to $6,500 Might Have Been the Bottom

Avatar Nick Chong 6 months ago

Bitcoin has had a crazy past 12 months. Since bottoming at $3,150 on December 15th, 2018, the cryptocurrency has bounced back. Hard. By June, a coin was trading for $14,000 a piece, up hundreds of percent since the year started.

Related Reading: Why There Remains a Case For a $4,200 Bitcoin (BTC) in 2020

Now though, Bitcoin is trading for $7,200 — a far cry from the five-digit price point we all saw earlier this year. The purported reasons for the fall are all over the map: some say it was the PlusToken scam, others say BTC just underwent an “echo bubble,” rallying and collapsing in quick succession as if it was trading in a condensed market cycle.

Whatever the case, investors are waiting for the cryptocurrency to show signs of bottoming, so the next market cycle can begin. While some say that the bottom is far below current prices — as low as $5,100, or maybe even lower — a few analysts have claimed that there is a high likelihood $6,500 was it for bears. Here’s more on why.

Bitcoin Fractal Suggests Bottom in At $6,500

Just last month, Bitcoin fell as low as $6,500 in a massive sell-off. Analysts say that this price action, coupled with the action preceding this move, may satisfy a fractal of the December 2018 bottom, meaning that the pain for the cryptocurrency market may be ending.

Popular trader Jonny Moe recently noted that the price action seen from December 2018 to now is structurally very similar to the entire 2016-2018 market cycle, with there being a parabolic run-up, a descending triangle consolidation, a breakdown of that triangle into capitulation, a then a five-wave bottoming process.

This isn’t the only time such sentiment has been proposed over the past few days. Per previous reports from NewsBTC, Cantering Clark recently observed an “uncanny resemblance” between the BTC price action seen over the last few days and the December 2018 accumulation phase.

The fractals suggest that the pain ended when Bitcoin hit $6,500, and that a new parabolic phase may begin to form next year.

Even Bloomberg agrees with the $6,500 was the bottom sentiment.

Bloomberg recently wrote that with Bitcoin’s price stabilizing “above its support level of the initial [CME futures] gap created on May 10,” there’s potential that a bottom was marked in the $6,500 range, which the cryptocurrency breached late last month shortly after tumbling under $8,000 after hitting $10,500 in the now-infamous “China pump.”

Related Reading: Crypto Tidbits: Deutsche Bank Gives Nod to Bitcoin, EOS to Host Social Media, France Digital Currency

Fundamentals Agree 

The fundamentals seemingly agree with the bullish sentiment.

Mike McGlone, an analyst at the firm, said that it is “only a matter of time” before the cryptocurrency breaches through resistance, the most notable of which being the horizontal and psychological resistance at $10,000.

McGlone backed this optimistic quip by looking to a potential rally in gold, which he claims would boost the Bitcoin bull narrative, as such a rally would be caused by macroeconomic turmoil, something analysts say is beneficial for alternative assets as a whole. He also looked to growing levels of adoption in the cryptocurrency space coupled with the idea that the impending halving will act as a negative supply shock for Bitcoin’s market economics.

Related Reading: Last Weekly Golden Cross Led Bitcoin to Rally 75% Rapidly; Will the Same Happen Now?
Featured Image from Shutterstock
Nick Chong

I am a writer who has been following Bitcoin for years now. My insights and interviews have been featured in leading publications in the industry such as LongHash and Decrypt. I own a small amount of Bitcoin.

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