TL;DR it finally happened. Did you catch it?
The long-awaited dip has finally occurred. At this point in time, bitcoin does not seem to be making measured moves. Instead, it soars by a thousand dollars a day, then consolidates a while, and then it’s another massive move up. Conversely, when it falls, it really falls hard.
Yesterday we saw BTC break up out of its downwards consolidation flag to put in a new high for the year: $9,097. The $9k area has been a magnet for price, with momentum suggesting that bitcoin would make at least one more leg up before correcting – something that was long overdue.
We have seen one mega-correction before recently, two weeks ago today, when bitcoin dropped $2,000 in a day, including $1,000 in a matter of minutes. This correction was less severe, but BTC still fell over $1,000 from its peak. The bottom so far has been $8,000 dead. So, what is next?
We’re of the opinion that this actually changes very little. We knew that a correction was needed, and while $1,000 is a lot, it doesn’t put the uptrend in any danger. Even if the price fell back to $6,000 – a 33% correction from the top – we wouldn’t be worried. That would arguably be very healthy for bitcoin. When the market rises so far and so fast, there needs to be some kind of retracement. If there isn’t then the uptrend is not sustainable, and will end sooner than we want. If this is the start of a multi-month or multi-year bullrun, there will be pullbacks here and there.
With that in mind, we can look for much the same targets as before. $6,000-$6,800 is our strong support zone, where bitcoin spent so much time in 2018. Bouncing off this would be a sign of strength, especially if it was a higher low – above the $6,178 of 17 May. To the upside, we’re looking at $9k once again, now established as resistance, and of course $10k.
The one thing we do know for sure is that there will be volatility. We’re probably looking for another large leg down, or else a ‘Bart’ formation back up to $9k. At this point, it’s impossible to say which it will be.
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