Bitcoin is not out of the digital woods yet. There is every chance that this pullback could accelerate as BTC failed to close above $8,000 yesterday. Traders and analysts are already looking at the next major buying zones and they tend to be in agreement.
Bitcoin: No Return to $8k
Over the past 24 hours Bitcoin has been relatively flat, returning to the same level after a drop to $7,600. The intraday high for BTC has been around the $7,900 level but it has started to consolidate around $7,800. Daily volume is also on the decline and has now dropped close to $20 billion.
Traders and analysts have been eyeing support levels as down appears to be the path of least resistance at the moment. With a failure to reach $8k again, and lower lows coming in, Bitcoin is likely to fall back to support at $7,600. Economist and trader, Alex Krüger, has been looking at the possibilities;
“$BTC still vulnerable. Longs once above $7900-$8000 (higher) or on panic flushes (lower). Next support: 7600-7435, 7200, 6800, 6400.
6800 is major, determined by all three price action, moving averages (50DMA) and fibs (Dec lows to 2019 highs). 6400 is the bull market level.”
$BTC still vulnerable. Longs once above $7900-$8000 (higher) or on panic flushes (lower). Next support: 7600-7435, 7200, 6800, 6400.
6800 is major, determined by all three price action, moving averages (50DMA) and fibs (Dec lows to 2019 highs). 6400 is the bull market level. pic.twitter.com/x7qfk5Ojgr
— Alex Krüger (@krugermacro) June 5, 2019
A retrace to the 50 day moving average is pretty much exactly at $6,800 and this is likely to server as a buying zone, Krüger added;
“I see the 6800-6200 area as a gigantic buying area. I do not know if price will drop there. I know what I’ll do if price drops there.”
Fellow trader Josh Rager commented that Bitcoin is in a condensing price range which could lead to another volatile move soon.
30 Percent Pullback Still Possible
If history rhymes a 30 percent plus pullback could still be plausible. From its high of just over $9k last week this would dump BTC back to the low $6ks or lower. Crypto trader ‘Moon Overlord’ echoed this sentiment adding a chart depicting the previous big corrections;
“If you think #bitcoin is in a bull market and are looking to buy the dip, look to the previous run for templates. The largest dip was barely -40%, most are in the -30%’s. A -30/-40 % dip from here coincidentally lines up with the strongest support in the high 5000’s low 6000’s”
https://twitter.com/MoonOverlord/status/1136250450615947265
Things happen fast on crypto charts and any dump to these levels is likely to occur in a matter of hours rather than a slow meltdown over weeks as witnessed in the bear market of 2018. Trading bots and stop losses are triggered en masse causing a cascade effect and the heavy red candles on the charts.
Long term hodlers need not worry about any of this, but day traders need to be aware of the short term movements. BTC anywhere around $6k is going to incite a lot of accumulation.
Image from Shutterstock
