Bitcoin has continued to rally higher since our last market update, recently retaking $9,300 for the first time since the crash on the morning of May 10th.
Bitcoin’s price action from May 8 to today charted by TradingView.com.
This strong recovery comes after Bitcoin fell as low as $8,100 due to a sell-off prior to the block reward halving, seen in the middle of the chart above.
Here is what analysts expect for the cryptocurrency market next.
Bitcoin Poised to See Short-Term Correction
While many believe that Bitcoin’s long-term outlook remains decisively bullish, fears are mounting of a short-term correction.
A top trader shared the chart below, indicating that from how he sees it, $9,300 is an optimal short opportunity because the cryptocurrency is running up against resistance.
Bitcoin price chart from @im_calmly (Twitter handle), a full-time crypto trader.
A move above $9,500 would invalidate the bearish scenario, the analyst noted, but the short playing out will see Bitcoin fall all the way to the key horizontal levels around $7,800 in the coming days.
Another prominent analyst — one that has been historically accurate in analyzing Bitcoin — shared the skepticism. He recently pointed to a fractal of a previous rally in BTC’s history that is structurally similar to the one we just saw.
This fractal predicts that the cryptocurrency will fall to $6,400 in the coming weeks, which would be a 0.5 Fibonacci Retracement of the rally from the $3,700 lows. A move to $6,400 would mark another 25% worth of losses from the current price point.
Chart from “Dave the Wave” (@davthewave on Twitter). The chart shows a fractal of a previous parabolic run-up in Bitcoin’s history, much similar to the one we just saw, and predicts a drop towards the $6,000s as aforementioned.
Long-Term Trend Still Bullish
Although there is a potential for a correction in the near term, the long-term trend remains bullish.
Michael Novogratz, a former partner at Goldman Sachs, told CNN yesterday that he still thinks Bitcoin will hit $20,000 this year, citing the macroeconomic fundamentals.
Reducing “look stupid” risk & a global “fiscal orgy” could see $BTC hit $20K by year-end! Colorful as ever conversation with @novogratz from Galaxy Digital. pic.twitter.com/sqdFZxKiNK
— Julia Chatterley (@jchatterleyCNN) May 12, 2020
Featured Image from Unsplash