After dipping below the $7,300 mark, the bitcoin price has recovered to $7,550, closing the last 4-hour candle at above $7,600. Although the initial corrective rally from $7,040 came to an end with a slight drop in the price of bitcoin from $7,500 to $7,300, it is possible that BTC tests a support level at $7,800 in the short-term, eyeing an entrance into the $8,000 region.
On February 6 and April 12, BTC bounced back from the $6,000 region by recording corrective rallies supported by a sudden spike in buy volumes. On April 12, BTC recorded a buy volume of 30,760 BTC, driving its price up from $6,900 to $8,000 in a single 30-minute candle.
The momentum generated from that particular spike in buy volume led BTC to secure mid-term momentum, eventually achieving $9,900 and testing the $10,000 support level.
In order for BTC to surpass the $7,800 mark and test the $8,500 short-term support level, a major buy volume spike would have to occur in the next 24 hours and push the price of BTC past $8,000. The initial corrective rally from $7,040 to $7,500 was triggered by a daily buy volume of 10,000 BTC, which is substantially lower than the volume seen in previous corrective rallies.
BTC has not completely recovered from downward trend initiated on May 6. It has failed to break out of the trend on three instances, with the corrective rally from $7,040 to $7,500 being the latest attempt to establish a strong support level for short to mid-term growth.
If BTC continues to demonstrate an increase in volume from the $7,550 mark and successfully breaches $7,900 in the next 24 hours, it would allow the dominant cryptocurrency to establish a bottom at $7,040 and begin a strong short-term rally back to the $8,500 mark and eventually test $10,000 in the upcoming weeks.
However, if BTC falls back to the $7,300 mark and re-enters the $7,200 region, a drop to the lower end of $6,000 is likely, and a short-term decline to $6,800 is inevitable.
The vast majority of cryptocurrencies in the market including Ripple, Bitcoin Cash, Ethereum, and small tokens have been following the price movement of bitcoin over the past two weeks, signifying that the market is currently extremely volatile and unstable.
Cryptocurrencies often begin to demonstrate independent price movements in a bull market as investors gain more confidence in the short-term performance of small digital assets. However, the coordinated movement of cryptocurrencies and tokens show that the cryptocurrency market is still in a recovery phase.
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Last modified: March 4, 2021 5:08 PM