Overnight, Bitcoin (BTC) has begun to ease off, with bullish momentum falling off across the board. However, some say it may be a bit too early to call for a doomsday-esque scenario, which sees BTC totally retrace its unexpected spike higher.
Bitcoin Moving Past $6,400
The moment BTC paused at $6,000 just days ago, not many thought that the asset was going to have the capacity to surmount $6,400– a level of utmost importance through 2018, as the cryptocurrency failed to fall lower than that level for months on end. Actually, it is so vital that it has acted as support on the daily, weekly, and monthly charts. Yet, lo and behold, Bitcoin bulls succeeded, rapidly taking control of the wheel to propel BTC past $6,400.
According to analyst “The Wolf of All Streets”, the fact that Bitcoin “nuked [$ 6,400] in one shot” is one of the most “powerfully bullish moves” that the asset has ever pulled off in its lifetime.
The $6400 area was the most traded for bitcoin in 2018. There was heavy daily, weekly, monthly supply there – and price just nuked it in one shot. This is one of the most powerfully bullish moves that bitcoin has ever made. pic.twitter.com/ldTtoOZkYE
— The Wolf Of All Streets (@scottmelker) May 11, 2019
This on its own, in the eyes of some, makes sure that if a pullback takes place from Bitcoin's recent $7,500 peak, $6,400 ought to stand up reasonably well, and may form a local bottom. This actually is not the only thing, however, making BTC look extremely bullish. Last week, Fidelity Investments was unveiled to be soon releasing a trade execution service for its tens of thousands of institutional clients, a supposed 58% of which are to some extent interest in cryptocurrency and blockchain technologies.
All the more importantly, TD Ameritrade and E * Trade, two American brokerages with a large retail following, are projected to launch spot Bitcoin and Ethereum trading in the coming weeks, preparing the stage for a considerable capital inflow.
The Case For A Drawdown
Generally there is a good case for a drawdown, however, even one that proceeds below $6,400. Trader Cantering Clark explains that even though the ongoing move seems “incredibly bullish”, BTC is nevertheless positioning under resistance, and is too far above its 20-week moving average. The 20-week moving average, according to Clark, has and is likely to continue to act as Bitcoin's center Bollinger Band, meaning that it should return to that level's vicinity in the near future.
He points out that as it stands, BTC is a “good three standard deviations from the norm,” with this move being fueled by retail shorts. This suggests that Bitcoin may shortly see a retracement, returning to more organic and sustainable levels as buying pressure slows in the coming weeks.
And as NewsBTC indicated in a previous report, history rhyming would see BTC fall by 20% to 25% here, just before entering the second phase of accumulation.
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