Just 24 hours ago, Bitcoin had rocketed back above $10,000 for the first time in weeks. It was a move that liquidated over $100 million worth of BitMEX shorts, shocking investors across the industry.
At the time, investors were extremely optimistic.
Galaxy Digital co-founder and CEO Mike Novogratz shared around the time of the surge that Bitcoin was primed to “move fast” after crossing $10,000.
“$BTC is coiling. It will take out 10k soon. All the tragic turmoil in the USA adds to the narrative. Budgets are going one way and it’s the opposite of balanced. When 10k goes it will move fast. Get on the train,” Novogratz said.
$BTC is coiling. It will take out 10k soon. All the tragic turmoil in the USA adds to the narrative. Budgets are going one way and it’s the opposite of balanced. When 10k goes it will move fast. Get on the train.
— Michael Novogratz (@novogratz) June 1, 2020
Chief executive of Real Vision Raoul Pal echoed the optimism, noting that Bitcoin’s rally was the “biggest chart pattern break out” in the asset’s lifetime.
But as fast as the asset rallied, it fell. The cryptocurrency reverted lower on Tuesday morning, falling from $10,100 to $8,600 in the span of three minutes in a massive liquidation event.
BitMEX’s Bitcoin price chart from TradingView.com.
Unfortunately for bulls, a legendary technical analyst believes that more downside is in the works.
Related Reading: Crypto Tidbits: Bitcoin Nears $10k, Goldman Sachs Talks Cryptocurrency, Chinese Yuan Slumps
Bitcoin Primed to Move Lower, John Bollinger Says
The creator of the world-famous “Bollinger Bands” indicator and a prominent technical analyst, John Bollinger, recently said that Bitcoin investors should be cautious at current prices:
“The is a Head Fake at the upper Bollinger Band for $btcusd, time to be cautious or short.”
The is a Head Fake at the upper Bollinger Band for $btcusd, time to be cautious or short.
— John Bollinger (@bbands) June 2, 2020
The analyst was referring to the indicator that shows his name, which shows that BTC broke to the highs of a range but failed to hold above it. This suggests that a reversion lower is possible.
Bollinger is known for making a number of crucial crypto market calls over the past few months.
After Bitcoin started tanking lower in October, he said there was a “good potential for a Head Fake.” Days later, the cryptocurrency exploded 40% higher in 24 hours.
And in the middle of December, he implied that BTC would form a macro trend per the Bollinger Bands. He was right when BTC started rallying just a few days later.
Price Trapped Under $10,500
One of the key arguments touted by Bitcoin bears is that the leading cryptocurrency remains below the key resistance of $10,500.
$10,500 is the level at which the BTC price was rejected during two crucial rallies over the past 12 months: one time during the “Xi Pump” and another time during February’s rally to $10,500.
The fact that BTC has made successive takes at the level without breaking past it suggests the crypto market is still situated in a downtrend.
Robert Sluymer of Fundstrat Global Advisors, for instance, recently made the following comment on the importance of the level:
“Next directional move on tap for BTC’s as bull-bear convictions are about to be tested. Bears can point to the downtrend at 10-10.5K. Bulls have the long-term uptrend (200-week sma) at their back and the past week’s resilience as BTC’s quickly rebounded from its 200-dma.”
Next directional move on tap for $BTC’s as bull-bear convictions are about to be tested. Bears can point to the downtrend at 10-10.5K. Bulls have the long-term uptrend (200-week sma) at their back and the past week’s resilience as BTC’s quickly rebounded from its 200-dma. pic.twitter.com/QrZ4SxYsxR
— Robert Sluymer (@rsluymer) May 14, 2020
Related Reading: Ethereum DeFi Nears $1 Billion Milestone Again, and That’s Big for the ETH Bull Case
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Tags: XBTUSD, BTCUSD, BTCUSDT