Bitcoin’s move below support of $7,800 after a month of consolidation gave bears and critics ammunition to cheer. Some are even claiming that the king of cryptocurrencies is dead just in time for the spooky season.
Bitcoin haters can make all the noise they want but the number one cryptocurrency is not going anywhere. It might go on another selloff but it will eventually regain its bullish composure. One crypto trader believes that bitcoin is likely to face one more leg down before it finally reverses its trend.
On Sept. 25, trader Max, AKA Ethereum Jack, took to Twitter to share his medium-term analysis on the dominant cryptocurrency. At the time, bitcoin was trading above $8,400. The trader and market analyst wrote that if the cryptocurrency was to resume its uptrend, it must recover $9,200. Otherwise, it might plunge all the way down to support of $6,250.
At $6,250, the trader predicted that many retail traders will capitulate only to see the cryptocurrency “moon in disbelief.”
Wednesday’s bitcoin nosedive eliminated the first scenario laid out by trader Max. Now, he believes that the cryptocurrency is in a downtrend and that people should “trade the trend.”
What’s interesting about bitcoin bottoming around $6,000 is that it allows the dominant cryptocurrency to convert a previous resistance into support. The widely-followed trader Hsaka agrees. To the analyst, a move down to $6,000 is an example of symmetry.
Just about the time trader Max started his bitcoin Twitter thread, Majin, Crypto Twitter’s biggest bull, predicted that the cryptocurrency will dump all the way down to $7,000. At the time, many people were still bullish and they believed that the move below $9,000 was a fakeout. However, Majin saw the bearish writings on the wall and now, we are a few hundred dollars away from $7,000.
So we asked the liquidity game theorist if he believes that bitcoin is in trouble. The analyst replied,
Barely anything happened. Just a long squeeze.
The trader has a point. The drop ignited a long squeeze to the tune of $205 million in an hour.
Majin is not alone to maintain a bullish stance amidst the breakdown. Todd Butterfield, the owner of the Wyckoff Stock Market Institute, thinks that the selloff ends here. When asked if he thinks whether bitcoin will bottom out here or will bleed all the way down to $6,000, the top Wyckoff analyst replied,
[We] bottom out.
It looks like we’ll have an interesting couple of weeks ahead of us. If the bulls are right, we’ll see bitcoin start to print a reversal pattern here. Otherwise, it’s possible that bitcoin will continue dumping to the $6,000 levels.
Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin, Ethereum, 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 Sam Bourgi.
Last modified: October 24, 2019 19:27 UTC