Deescalation in Iran may have triggered profit taking in bitcoin. Although, analysts remain bullish and predict it won’t go lower than $7,800.
After a strong rally catalyzed by the tensions in Iran, bitcoin is starting to show signs of exhaustion. From a low of $6,853.53 on January 3rd, the digital gold soared and posted a 2020 high of $8,463.57 in less than a week.
Since then, the cryptocurrency has been succumbing to profit taking. That’s not surprising considering that bitcoin printed gains of over 23 percent in a short period of time. Many analysts are predicting that the best level to bottom pick bitcoin would be $7,700 or lower.
If you’re waiting for BTC to drop lower, I may have some bad news for you. Some of the widely-followed analysts on Twitter are predicting that the pullback is over. It is very likely that the top cryptocurrency won’t drop any lower than $7,800 before rallying to $8,800 or even $9,000.
Bitcoin appears to be losing steam as the turmoil in the Middle East deescalates. Without any catalyst to push the cryptocurrency higher, it appears that a significant move down should be expected.
Nevertheless, several analysts believe that momentum has swung to the side of the bulls. The cryptocurrency is now dancing to a different tune. Liquidity-game theorist Majin called for a correction at $8,400. According to the analyst, the pullback gives whales a chance to add more longs.
Interestingly, bitcoin appears to have printed a low at $7,872.09, which is seven points shy of Majin’s bottom of $7,865. The analyst added that a rally from current levels would surprise almost everyone and introduce FOMO.
Majin is not the only one who believes that the bitcoin correction ran its course. Trader Galaxy also thinks that the number one cryptocurrency would not dip below $7,800. The analyst posted on Twitter a possible roadmap to $8,800.
In addition, a pseudonymous trader named CryptoWolf also predicts that the dominant cryptocurrency wouldn’t drop lower than $7,860. Should bulls hold that level, the previous resistance would be turned into support. This would catapult the cryptocurrency to his initial target of $9,550.
However, not everyone is boldly optimistic. For instance, CryptoThies is waiting for a deep pullback to between $7,300 and $7,500.
If you’ve been following bitcoin for many years, you’d know that the king of cryptocurrencies has the tendency to leave bottom pickers behind once it turns bullish. Corrections are often shallow and short-lived. Those who wait for a reasonable pullback are usually forced to buy at a higher price.
We’ve seen this happen in all the four parabolic advances of bitcoin in the past. If the top cryptocurrency is in a new bull market, there’s no reason to expect it to behave differently. A move towards $8,800 – $9,000 should further validate this view.
Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
This article was edited by Samburaj Das.
Last modified: January 22, 2020 11:39 PM UTC