Following a rapid surge in the Bitcoin price from $3,614 to $4,000 within a span of three days, traders are expecting BTC to retrace by around 7 percent to $3,700.
The cautious projection on the price trend of the dominant crypto asset comes after the failure of BTC to climb beyond the crucial $4,000 resistance level.
On February 19, BTC achieved $4,000 across major crypto exchanges including Bitstamp and Binance. Shortly thereafter, it fell to the low $3,900 region and today, below the $3,900 level.
The price trend of BTC in the past four days is strikingly similar to its trend from February 8 to February 12.
In early February, in a span of four days, the same time frame as the recent price movement of BTC, the price of BTC surged from $3,337 to $3,711 and pulled back to the $3,500 region.
In the upcoming days, traders foresee BTC demonstrating a similar movement as before.
Edward Morra, a cryptocurrency technical analyst, said:
Now, when BTC tapped origin of supply, I’d expect it to pull back, my zones of interest are $3,675 – $3,725.
If you were looking to short, this is the closest point to invalidation (stop above that wick), if this was it – price has no business going above it, therefore clear invalidation place for you.
But, the near-term minor correction of Bitcoin could positively affect the trend of the crypto market in the weeks to come as it will provide more stability and a strong ground to initiate short-term rallies.
Following its initial drop from $3,711 to $3,500 in early February, BTC recorded an extended period of stability and initiated a strong rally to $4,000.
If the asset regains momentum in the upcoming days and potentially establishes a robust floor to cleanly break out of the critical $4,000 resistance level, it may benefit the market.
On February 20, as CCN.com reported, economist Alex Krüger stated that although $3,700 remains as a strong support level, breaking out of the $4,200 resistance level could trigger a rapid upside movement.
Short term, see BTC in the 3700-4200 range.
R: 4000, 4200, 4400, 5000, 5500
S: 3800, 3700, 3600/3550, 3450, 3350, 3150, 3000
Once price breaks 4200 it could move FAST. Matter of watching levels, just like 3700 yesterday.
The key for the short-term prosperity of the crypto market is for BTC to break out of major resistance levels with strength.
The daily volume of the market has largely recovered and the overall interested in the asset class has significantly increased.
CME Group, one of the largest futures markets in the U.S., reported that BTC futures saw a record high volume on February 19.
As the trading activity in the crypto market increases, the liquidity of both Bitcoin and small market cryptocurrencies will rise in the weeks to come.
Already, major crypto assets in the likes of Ethereum, Ripple, Bitcoin Cash, and EOS have recorded losses in the range of 2 to 4 percent against the U.S. dollar on the day.
The lack of momentum in the price trend of BTC has also started to affect tokens that have outperformed the majority of digital assets in the past 30 days.
Tokens such as Binance Coin, VeChain, Ontology, Status, and Waves have begun to decline and could see intensified downside movements in the next 24 to 48 hours depending on the performance of BTC.
But, even if the cryptocurrency market demonstrates a poor performance in the days to come, the strong fundamentals of major digital assets are expected to allow the market to regain momentum.
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Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: June 14, 2020 11:11 AM UTC