There are many traders flipping bearish after Bitcoin’s strong retracement over the past day.
As reported yesterday, Ethereum’s inability to hold $210 indicates that more downside is on its way for the leading altcoin. Ethereum dropping would likely result in weakness for Bitcoin, as the two cryptocurrencies tug each other in different directions.
Yet, the technical evidence is starting to suggest that the bearish fears are overblown, with one trader even arguing that $10,000 in the coming days is a possibility.
Bitcoin is Preparing to Rocket Back Towards $10,000: Fractal Analysis
One popular trader shared the chart below, indicating that there are remarkable similarities between Bitcoin’s price action for all of 2020 and that of the past three days: both periods have a four-phase distribution top, a capitulation crash, then a rapid recovery from the lows.
The fractal playing out in full, the trader suggested, will result in BTC returning to $10,000 in the coming two to three days.
Chart from @Yodaskk (Twitter handle), a popular crypto trader. The charter shows that there are eerie similarities between Bitcoin’s recent crash and the crash in March. This fractal predicts BTC may soon return toward $10,000.
$10,000 may also be imminent due to the creation of a CME futures gap, which happens when BTC is volatile when the CME isn’t open on weekends, between Friday’s close price of ~$10,000 and the open price of ~$8,800.
Price gaps, analyses have suggested, fill a majority of the time within a week of the gap opening.
Not the Only Strong Sign
Corroborating this bullish sentiment is the fact that Bitcoin has held some critical levels despite Saturday and Sunday’s carnage.
A trader explained that as long as Bitcoin holds $8,530 into Sunday’s candle close (as it just did just an hour ago), it will confirm a sweep of liquidity at a “pivotal level.”
“Lots riding on the next 24 hours. Want to see 12H, followed by the daily, close above $8530 to confirm a sweep into pivotal level. Close below and we have our first significant HTF break in MS to the downside since the bottom,” the trader wrote in reference to the chart below.
Chart from “HornHairs” (@CryptoHornhairs on Twitter). The chart indicates that Bitcoin could maintain some semblance of a bullish market structure should a key level hold.
On the fundamental side of things, Rafael Schultze-Kraft of Glassnode, a leading crypto analytics firm, observed that just a day out from the halving and “Bitcoin’s fundamentals are stronger than ever.
Here is some of what he found when comparing data from the time of the last halving to data from today:
Bitcoin’s new daily addresses count — indicative of users joining the network — is up 68%
The average count of daily transactions rose by 44%
The average value of daily transactions (U.S. dollar terms) has risen by 700%, which is reflective of the growth in BTC
Hash rate is up 6,837%
Photo by Alex Alvarez on Unsplash
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Author: Nick Chong