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Why Analysts Think Bitcoin Price On Verge of Crash to $6,000

Avatar Nick Chong 1 month ago

After a strong uptrend that brought Bitcoin from $6,800 to $8,450 in a matter of a few days, the cryptocurrency market has started to take a massive breather. Since peaking at the key $8,400 resistance just the other day, the price of BTC has plunged by 8%, tumbling to $7,800 as of the time of writing this article.

Related Reading: Bye-Bye Bear Market? These Hallmark Bitcoin Reversal Signs Appeared

While some say it is too earlier to tell that this is a full-fledged reversal, analysts are wary that this pullback is a precursor to a drop into the $6,000 range, which would likely perpetuate the bear market Bitcoin has found itself in over the past six-odd months.

Bitcoin Poised to Fall Towards $6,000s, Analysts Assert

CryptoHamster noted that the price action seen after Bitcoin tapped $8,400 has been rather negative.

Firstly, the local volume peak marked the top, seemingly implying that it was a so-called blow-off top, which is a chart formation most often followed by deep retracements. Secondly, the TD Sequential is about to print a sell nine candle, implying a strong bearish reversal in the coming days that will only amplify what has already been seen. And lastly, the ADX and Fisher Transform — two directional technical indicators — suggest that bears are taking control after the short rally by bulls.

As to where BTC could end up in this retracement, analysts have looked to the $6,000s, unfortunately enough.

Cryptocurrency trader HornHairs noted that if BTC manages to close the weekly candle on Sunday under $7,870, he will expect a strong move down to the $6,000 flat (a region of key, key macro support), noting that the recent price action is rather indicative of a clear bull trap.

Do Bulls Have Any Hope?

With this confluence of bearish analyses, the question remains — do bulls have any hope?

According to Financial Survivalism, a pseudonymous analyst that last week called Bitcoin’s surge into the $8,000s when the asset was trading in the high-$6,000s, for sure.

In a recent TradingView post, the analyst asserted that he still expects for BTC to hit $20,000 by July 1st of this year, despite the drop that has been seen. He specifically looked to the following technical readings:

  1. The Lucid Stop and Reversal has printed a bullish candle for the first time since July 2019, when BTC was trading well above $10,000.
  2. The Average Directional Index on a daily basis has seen the first bullish crossover since March 2019.
  3. The one-week Relative Strength Index for Bitcoin is “getting ready to test 50,” a level that if broken through may imply dramatic upside.
  4. The one-day Ichimoku Cloud has formed a bullish TK cross.

Also, the fundamentals for Bitcoin and the broader cryptocurrency space remain decisively positive. Just the other day, January 6th, the hash rate of the Bitcoin network — a measure of the computational power being allocated to processing BTC transactions — hit a fresh all-time high above 120 exahashes per second, signaling that miners are continuing to allocate vast amounts of capital towards this space.

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Nick Chong

Since 2013, Nick has shown interest in Bitcoin and cryptocurrencies. He has since become involved in the industry as a full-time content creator, working for NewsBTC, Bitcoinist, LongHash, among other outlets. Aside from covering...

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