Bitcoin is back in the headlines after the outrageous price action it experienced before and after the halving. The flagship cryptocurrency peaked at $ 10,100 on May 7, then fell 22% over the weekend. Now, BTC is supported, recovering most of the losses recently suffered.
Regardless of the high levels of volatility, one of the leading analysts in the cryptocurrency industry believes that Bitcoin is ready for an abrupt correction before continuing its historic bull run.
Bitcoin faces strong resistance ahead
The trade fan, known for his daring price forecasts, maintains There are many reasons to believe that the Bellwether cryptocurrency is reaching overbought territory. The moving average convergence divergence (MACD), for example, became bearish on the daily BTC chart.
The cartographer suggested that as the 12-day exponential moving average fell below the 26-day exponential moving average, the chances of a withdrawal from current price levels increased significantly.
Related Downloads:
In addition, there is a significant resistance barrier to the pioneering cryptocurrency that could prevent it from advancing further. This supply wall is currently represented by a downward trend line dating back to December 2017.
Since then, this level of resistance has been able to reject the June 2019 rally at $ 14,000, the increase in mid-July 2019 to $ 13,200, the upward movement since early August 2019 at $ 12,300 and the momentum of mid -February 2020 at $ 10500.
While it is reasonable to believe that resistance weakens over time, the more it is tested, this multi-year trend line is still very important to the Bitcoin trend. If it continues to hold, the flagship cryptocurrency could be forced into another decline to around $ 6,300, according to the analyst.
Bearish momentum at this level of support could help eliminate some of the so-called “weak hands” while allowing marginalized investors to re-enter the market.
A new influx of new capital into the industry could possibly cause Bitcoin to finally surpass the overhead resistance and enter the full-fledged bull market that most investors and crypto enthusiasts have been waiting for.
Whales fill their bags
Although everything seems to indicate that a correction is in progress, the data from Santiment reveal that the number of BTC "hodlers" on the network is increasing at an astronomical rate.
The company's "spread holder" graph shows that the number of addresses from 0.001 to 100 BTC, which can be considered as retail investors, has increased steadily in the past six months, reaching higher peaks. .
Meanwhile, the number of larger whales, from 1,000 to 10,000 BTC, began to increase in late April, coinciding with the entry into the market of billionaire Paul Tudor Jones.
Due to the shock in world economies, it is essential to pay close attention to the action of Bitcoin prices in the coming days.
The break above the aforementioned downtrend line would be seen by many as the start of a new bullish cycle. Conversely, a rejection of this level of resistance will open the doors to those who have lost the pot to place their bullish bets.
Featured Image from Unsplash