It appears that Bitcoin bulls aren’t ready to take a breather just yet after the jump to $7,600 just hours ago. Just minutes ago, the cryptocurrency surged past $7,900, reaching as high as $7,920 as buyers finally have stepped in. As of the time of writing this article, the cryptocurrency is up 5.79% in the past 24 hours, slightly underperforming Ethereum’s near-6% performance and dramatically falling short of XRP’s jaw-dropping 12% gain.
Although the momentum is impressive, some analysts are starting to fear that a short-term pullback is likely on the horizon, citing a number of technicals and chart patterns that suggest Bitcoin may be overextended in the short term.
Bitcoin Poised for Short-Term Pullback
CryptoHamster noted that with this major pump, Bitcoin has reached the upper bound of a key downward channel that the cryptocurrency has been trading in for some seven or so months now. This may imply that prices could see a strong pullback, for BTC was majorly rejected off this downtrend three times in the past few months.
The major downtrend channel resistance test.
Technically, a nice short opportunity with a tight stop loss.
Still, a scam-wick to 8000$+ is very likely to occur. $BTC $BTCUSD #bitcoin pic.twitter.com/jHHo36Zhi5
— CryptoHamster (@CryptoHamsterIO) January 7, 2020
Not to mention, the cryptocurrency is currently at a clear horizontal resistance level that has been relevant since September of last year, meaning that Bitcoin will need strong momentum to clear past these levels prior to a move higher.
Lets clear 7860 – 8090 resistance Don, and 9k's is on target. pic.twitter.com/s4zfgN845L
— CryptoWolf (@IamCryptoWolf) January 6, 2020
Eventual Bullish Continuation Likely
While there is a extremely short-term bearish argument as outlined by the abovementioned analysts, the seeming consensus among analysts is that eventually (meaning the coming day or two), Bitcoin should continue to rocket higher.
Per previous reports from NewsBTC, Josh Olszewicz, an analyst at Brave New Coin, recently noted that an inverse head and shoulders chart pattern — a bullish pattern that is likely to mark a strong bottom for BTC — is playing out for Bitcoin.
Not to mention, Bitcoin’s hash rate— the measure of computational power processing BTC transactions — hit a new all-time high on the 1st day of 2020. The all-time high, 119 exahashes per second, or 119 with 18 zeroes after it.
Related Reading: Why Bitcoin Network’s Record 2019 Is Bullish For the Crypto Market
This surge in the hash rate breaks the previous all-time high set more than two months ago in October, meaning that Bitcoin’s network is now stronger than ever before, marking an amazing start to 2020.
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