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Bitcoin has seen some insane price action over the past several days and hours, with the cryptocurrency currently being in the process of rebounding from its recent capitulatory downtrend that sent it reeling from highs of $8,000 to lows of roughly $3,600 last night.
In the time since this massive selloff, bulls have been able to step up and lead the cryptocurrency slightly higher, although it still appears to be in a precarious position due to the underlying weakness that was elucidated by this movement.
Analysts are now noting, however, that despite the overt bearishness of its recent price action, there is a realistic path forward for the crypto to see an intense rally in the weeks ahead, but there are a few key factors to watch closely for.
Bitcoin Rallies Towards $6,000 Following Capitulatory Selloff, But Faces Strong Resistance
At the time of writing, Bitcoin is trading down just over 11% at its current price of $5,380, which marks a notable climb from daily lows that were set within the mid-$3,000 region during last night’s freefall.
It appears that this movement was catalyzed by a cascade of liquidations on BitMEX, with the intense selling pressure snowballing and making it impossible for bulls to absorb the selling pressure.
The selloff halted, however, at the exact instant when BitMEX went down due to a “hardware issue,” with the platform remaining down until the benchmark cryptocurrency had already bounced to over $5,000 on most other exchanges.
Now, analysts are noting that the recovery from these recent lows has all the marking of a long-term bottom formation, with BTC bouncing at its weekly orderbook EQ support.
“BTC Bottom Edition: Look at it this way, we just had the whole echo pump and echo dump of 2017 top to bottom to 14k top. -72% from 14k top and >84% of the 3-14K move retrace. On a weekly orderblock EQ support. For obvious reasons I call this chart: ‘The BOTTOM’” Bitcoin Jack, a popular analyst, noted in a recent tweet.
$BTC Bottom Edition
Look at it this way
We just had the whole echo pump and echo dump of 2017 top to bottom to 14k top
-72% from 14k top and >84% of the 3-14K move retrace
On a weekly orderblock EQ support
For obvious reasons I call this chart: "The BOTTOM" https://t.co/jtoOumaKnt pic.twitter.com/ujmwohkmf6
— //Bitcoin 𝕵ack 🐐 (@BTC_JackSparrow) March 13, 2020
Here’s the Path Forward for BTC to Rally Higher
TraderXO – another popular cryptocurrency analyst and trader – explained in a recent tweet that if BTC forms an accumulation range here and closes its weekly candle above its 200-day moving average, the bull case will be incredibly strong.
“BTC: Solid bounce so far on btc – dust will probably settle this weekend. Hoping this forms an accumulation range – dips are for buying. If you get the chance to buy at the mid and range lows its a no brainer imo. A weekly close above the 200 weekly MA = Bullish,” he explained.
https://twitter.com/TraderX0X0/status/1238444693542907905
As TraderXO notes, how the dust settles following this insane volatility seen throughout the past few days should provide traders and investors with significant insights into the fate of the markets.
Featured image from Shutterstock.
