Bitcoin (BTC) saw an unprecedented selloff today that led it to plummet to fresh yearly lows of $5,200, which is where it was able to find some support that has since led its price to rebound back up to the $6,000 region.
This intense selloff was extraordinary and has sparked extreme fear amongst cryptocurrency investors, although it is important to keep in mind that the crypto is only trading slightly below where it was just three months ago.
One top analyst is now noting that Bitcoin cold be in for a multi-month bout of accumulation while it establishes a long-term bottom, which could mean that this overtly bearish movement will ultimately result in further upside.
Bitcoin Plummets $2,000 as Volume Skyrockets
At the time of writing, Bitcoin is trading down just under 22% at its current price of $6,100, which marks a massive decline from daily highs of nearly $8,000 which were set yesterday evening when the cryptocurrency’s bulls attempted to defend it from dropping below $7,700.
This movement marked a massive extension of the downtrend first incurred by the cryptocurrency just a few weeks ago when it faced a strong rejection at $10,500, and it appears that its break below $7,700 overnight eviscerated all of its support.
Analysts are noting that this movement was backed by significant volume, which surged to highs not seen since June 27th of last year.
Josh Olszewicz – a prominent cryptocurrency analyst on Twitter, spoke about this phenomenon in a recent tweet, also noting that the crypto saw its lowest RSI since November of 2018.
“1D BTC (BLX). Highest volume since June 27th. Lowest RSI since Nov 2018,” he said while pointing to the chart seen below.
1D $BTC (BLX)
Highest volume since June 27th
Lowest RSI since Nov 2018 pic.twitter.com/HRaim6UqM4
— Josh Olszewicz (@CarpeNoctom) March 12, 2020
Top Trader: Expect BTC to Enter a Bout of Sideways Trading for 3-4 Months
Nik Patel, a prominent cryptocurrency analyst on Twitter, spoke about Bitcoin in a recent tweet, explaining that he believes it will see similar price action going forward to that seen in late-2018 and early-2019, which means that it could now enter a multi-month bout of sideways trading.
“It might be a while before we see 5 digits again for BTC. Wouldn’t be surprised to see 3-4 months of accumulation down here sub-capitulation, similar to the original bottom. If liquidity gets pumped into the system, that might speed up the process.”
It might be a while before we see 5 digits again for $BTC.
Wouldn't be surprised to see 3-4 months of accumulation down here sub-capitulation, similar to the original bottom.
If liquidity gets pumped into the system, that might speed up the process. pic.twitter.com/vZlBMNmhec
— Nik Patel (@cointradernik) March 12, 2020
It is important to note that Patel does note that this sideways trading could mark a bout of accumulation, suggesting that the it will ultimately see a notable rebound in the months ahead.
Featured image from Shutterstock.