Bitcoin has recaptured the support it had previously established at $6,800, with its rebound from daily lows around $6,600 being a bullish sign that seems to unveil some underlying strength amongst the benchmark cryptocurrency’s bulls.
One analyst is now noting that the large clusters of volume that have occurred in tandem with Bitcoin’s previous capitulatory declines seems to indicate that it has established its March 12th lows as a long-term bottom.
If history rhymes, this means that a parabolic uptrend could be imminent.
Bitcoin Captures Bullish Support Level as Analysts Eye Upside
Bitcoin’s recent jaunt below $6,800 sent shivers down the spines of some investors, as its swift rejection at $7,200 coupled with its break below this support seemed to be an overtly bearish sign.
The sharp rebound from these lows that has since led Bitcoin back above this aforementioned support, however, shows that bulls have more strength than they previously appeared to have.
Currently, Bitcoin is trading down just over 3% at its current price of $6,820, with this marking a climb from daily lows of $6,600.
In the near-term, it does appear that some prominent traders are growing bullish on the cryptocurrency.
Flood, a highly respected trader, noted in a tweet from this morning that he believes BTC’s market structure is bullish as long as it remains above $6,500.
“I hate planning out multileg trades but probably something like in the next few days. I’m bull biased here unless we dump below 6.5k. Then it would be pretty clear invalidation,” he noted while pointing to the below chart.
I hate planning out multileg trades but probably something like in the next few days. I’m bull biased here unless we dump below 6.5k. Then it would be pretty clear invalidation. pic.twitter.com/e16Gj94JzD
— Flood [BitMEX] (@ThinkingUSD) April 13, 2020
Volume Clusters Suggest the BTC Bottom is In
One interesting phenomenon that suggests Bitcoin’s March low of $3,800 is a long-term bottom is the large cluster of volume surges seen on its weekly chart.
One popular cryptocurrency analyst on Twitter spoke about this occurrence in a recent tweet, explaining that one can make a solid case that the bottom is in based on this pattern alone.
“Based on volume clusters, one can make a solid case that the bottom is in Bitcoin (weekly),” Big Cheds said.
Based on volume clusters, one can make a solid case that the bottom is in $BTC #Bitcoin (Weekly View) pic.twitter.com/10FyLBqc3i
— Big Cheds (@BigCheds) April 13, 2020
While looking at this chart, it does appear that intense multi-week rises in volume, like that seen in early-March, do tend to correlate with mid-term bottoms.
It is also worth noting that these bottoms do not historically result in periods of consolidation but are rather followed closely by intense uptrends – like that seen throughout the first half of 2019.
Featured image from Unsplash.