Bitcoin has once again found itself caught firmly within a bout of sideways trading in the lower-$6,000 region, which comes close on the heels of the benchmark cryptocurrency’s recent rally up to highs of $6,900.
This consolidation is highly likely to result in a massive movement in the near-term, leading some prominent traders to note that it is probable that the cryptocurrency rallies higher as bulls wipe out late short positions.
The next rally may also be followed by massive downside movement, which could lead BTC to post some significant losses in the days and weeks ahead.
Bitcoin Consolidates Around $6,000 as It Gears Up for a Big Move
At the time of writing, Bitcoin is trading down just over 2% at its current price of $6,050, which marks a slight decline from daily highs of nearly $6,400.
In the time following BTC’s rally up to highs of $7,000, the cryptocurrency has been trading sideways within the lower-$6,000 region, which appears to signal that bulls and bears have reached an impasse.
This may mean that a massive movement is looming on the horizon, which is likely to favor sellers – according to one prominent analyst.
TraderXO, a highly respected analyst and trader, spoke about this in a recent tweet, explaining that he believes Bitcoin will “raid” $6,500 in the near-term stopping out late shorts, before incurring significant selling pressure that leads it to decline towards its weekly open around $5,000.
“BTC – Don’t be surprised if we see one more raid around 65s before a bigger drop – wiping out a large number of late shorts / tight stops. If it plays out – below is how I’m setting up,” he explained.
$BTC – Dont be surprised if we se one more raid around 65s before a bigger drop – wiping out a large number of late shorts / tight stops
If it plays out – below is how I'm setting up
p.s – Ive taken 50% profit at 6k from my earlier 6,4k short entry pic.twitter.com/XNeoQEEODa
— TraderXO (@TraderX0X0) March 22, 2020
Here’s Just How Low This Next Decline Could Lead BTC
TraderXO further goes on to explain that he believes the next selloff could extend far beyond the crypto’s weekly open, potentially leading it as low as the mid-$4,000 region.
“BTC – not sure how many more times 58 – 59s will hold up. It’s been tagged far too often now. Expecting price to roll over in the week to low 5s possibly mid 4s,” he said.
$BTC – not sure how many more times 58 – 59s will hold up.
It’s been tagged far too often now.
Expecting price to roll over in the week to low 5s possibly mid 4s
— TraderXO (@TraderX0X0) March 22, 2020
TraderXO isn’t the only analyst anticipating further downside in the days and weeks ahead, as TraderSZ – another prominent trader – said in a response to the above tweet that he thinks it will decline as far as $3,100.
Featured image from Shutterstock.
