On Monday, the Bitcoin (BTC) price started to falter. After trading above $7,000 for days on end — a consolidation that forced volatility levels to hit multi-month lows— the cryptocurrency slipped on Monday morning, falling from $7,100 to $6,800 in three five-minute candles, catching many traders with their proverbial pants down.
Despite the fact that the cryptocurrency remains above key supports in the $6,000 region — an area of utmost importance during the 2018 bear market, acting as a “make or break” level for Bitcoin — a top analyst claims that the pain is not over yet.
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Bitcoin Still Has Potential to Drop 20%
According to a recent update from Jacob Canfield, a professional cryptocurrency trader, Bitcoin is not yet near a macro bottom in his eyes. He remarked that the cryptocurrency is likely to see a 20% drawdown from the current level of $6,900 to $5,500, for there is where the 0.786 Fibonacci Retracement of the rally from $3,100 to $14,000 lies.
What price do you guys have for the bottom on this #bitcoin downtrend?
I think we could see $5500 personally as it is the 78.6% from the swing low to swing high, but we may see a bounce or two in between here and there. pic.twitter.com/2TSK8XhecH
— Jacob Canfield (@JacobCanfield) December 17, 2019
Canfield’s analysis that a move to $5,500 could be had corroborates a similar thought from trader CryptoBirb, who noted that Bitcoin still is likely to see one final dump to $5,400-$5,600, which he also pointed out coincides with the 0.786 Fibonacci.
Birb added that this drawdown would validate a trend seen in previous market cycles, which saw BTC see a short-term bearish though macro bullish throwback to key support prior to a resumption of a parabolic uptrend.
There’s also Cold Blooded Shiller, a trader who recently suggested that the leading cryptocurrency’s chart suggests that a bottom is not yet in: “From a volume perspective, there is nothing to me that screams “THIS IS THE BOTTOM.” For both markdowns and markups we typically expect to see ‘climactic’ volume,” he wrote.
This is what I'd like (and expect to see):
Price coming out of the markdown channel (downside)
Large volume increase (creating an anomaly against prior volume)
That brings us on to the final piece of information we can use in this set up. pic.twitter.com/6zB4TWnzk0
— Cold Blooded Shiller (@ColdBloodShill) December 7, 2019
Is Macro Uptrend Still Intact?
While a move back to the $5,000s could be had, many researchers have asserted that the macro uptrend for the Bitcoin market remains intact.
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