Bitcoin shrugs off recent selling pressure – Rebounds to $8,000 and more


Another week has passed, and Bitcoin, despite an isolated attempt to bring it down to its knees, has refused to throw in the towel and capitulate. Almost as an act of defiance to its critics, the oldest and largest cryptocurrency rebounded from the depths, roughly $7,000, but as low as $6,400 on a few low liquidity crypto exchanges, and is now pounding once more on the $8,000 door of resistance. New insights are coming forward that suggest that we might be in store for even more exciting times ahead.

Analysts had been claiming that a correction was in order, forecasting with certainty that technical data was signaling a sudden pullback, or profit taking, if you will. When the drop occurred, a few of the analyst community actually thought that they had called the event, but others disagreed: “Analysts including Dovey Wan, a founding partner at Primitive, stated that the brief price drop of bitcoin on Friday was likely due to manipulation engaged by a single investor. As the investor sold 5,000 BTC on Bitstamp, it triggered contracts on BitMEX, which heavily relies on Bitstamp, to get liquidated.”

The cited manipulation tactic is not that uncommon to any trader that has had his stop losses hunted down in the forex market, right before a strong uptrend takes over. Yes, there might be a shady broker or two that posts a low sell price in order to grab up “cheap” stop loss order volume, but regulators come down hard on this practice, a reason why it is not that prevalent. What is actually transpiring is that an institutional investor with an extra large “Buy” order must first jerk the mark down, perhaps, by initiating a significant “Sell” order, before buying big time. Such is the challenge of being a large block investor, when liquidity issues could ruin your day.

Further confirmation of this scenario occurred when the Bitcoin market abruptly bounced back, some 10% to 15%, depending upon your exchange of choice. Fundamental forces are still at work, namely: 1) Bitcoin is a “safe haven” when geopolitical tensions heat up; 2) Market access is increasing, especially when Fidelity, TD Ameritrade, and E*Trade unleash 40 million investors upon the crypto market, and 3) The Bitfinex/Tether scandal actually drove more volume to Bitcoin, as holders of Tether “USDT” sought safety.

There is one more phenomenon that usually follows these moves in the market. Bitcoin has rushed forward and will now, if you buy into this thinking, consolidate and hover about within tight ranges for a few weeks. In times like these, the “green light” for altcoins suddenly begins to shine brightly. The Cryptomist, a popular cryptocurrency analyst on Twitter, stated in a recent tweet: “$BTC Flagged form on 4hr timeframe. I expect this to be broken by the end of the month, so approx 29th May. Support low as 7.2, resistance high as 8080 regions. If btc stays within this pennant until the end of the month, then I expect ALTS TO MAKE A RUN!”

Another well followed cryptocurrency trader, who goes by the online alias “Satoshi Flipper”, predicts a slight pullback, but then a run on altcoins: “I’ve been definitely vocal about a healthy BTC retrace, but I do not believe it will be a drastic 30% retrace back into the $4k’s. Once we form a local top, I believe we will [see] 10% at the most, then settle down sideways. That is when we’ll have a real altcoin season that everyone is expecting. Upon the immediate retrace, altcoins will take a small hit, but then, when BTC settles down sideways, altcoins will rebound in a huge way.”

There is a subset of analysts, however, that is focusing on the “block reward halving” of Bitcoin, scheduled to occur in May 2020. Tighter constraints on supply have historically resulted in more pressure on the upside. This fundamental event adds to the commonly held theory that increasing demand will soon hit declining supply, a definition of a “perfect storm” of sorts for Bitcoin and for its altcoin brethren.

Josh Rager, a cryptocurrency technical analyst, recognizes what the future might bring down the road, but he also sees more current buying pressure, as well: “Bitcoin certainly looks to be pumping, now over previous resistance. Price is near $8,000 & looks to be heading toward the $8,200 1D resistance (might consolidate prior) A close above $8,200 on the daily/weekly would be very bullish and would target $9,600+.”


Read Also: