Bitcoin may sustain above $8500 but $7500 is a rational retracement level
For Bitcoin, the question of ‘what’s next’ is always going to prevalent.
After months of speculation regarding its price before the halving, the historic third halving finally took place and the rewards were reduced to 6.25 BTC per mined block.
However, a 15.22 percent pullback just a couple of days before the event altered various assumptions and recent analysis, we identified few factors that might have an impact on Bitcoin’s price movement in the near-term.
Bitcoin 1-day chart
On observing the chart above, it can be verified that in spite of the drop witnessed on 10th May, Bitcoin did not breach its long-term ascending channel. The asset’s valuation continued to mediate between trend lines but at press time, the market situation for BTC has completely changed. It is unlikely that Bitcoin will undergo another bullish run after the halving, as a majority of the bullish momentum during the rally was based on the halving sentiment.
A break away from the ascending channel pattern looks highly probable, marking another phase of corrections.
Case 1: Bitcoin remains above support $8500
Now, although Bitcoin dropped from $9700 to the lower range of $8000, the asset quickly consolidated above the $8500. Bitcoin remained above support at $8500 which also underlined the fact that 200-Moving Average continues to be a support. A bullish indicator in the market, Bitcoin will be off-bearish concerns if the asset is able to maintain sideways movement between $8500 and $9500 over the next few weeks, to solidify a strong bottom at this range.
Case 2: Bearish corrections to $7800-$7500
Now, a possible return below $8000 cannot be dismissed. According to VPVR indicator, the Point-of-Control (red line) currently remains above Bitcoin’s valuation hence, the asset might find it difficult to consolidate above $8750 at the moment.
MACD line turned bearish for the first time since 20th March, and currently, the signal line remained comfortably above the MACD line. Relative Strength Index also dipped as selling pressure took over the Bitcoin market.
Hence, these indicators suggested that Bitcoin could possibly face corrections all the way down to $7800, with the possibility of touching $7500. However, a collapse below $7500 is not foreseeable in the near future.
OhNoCrypto
via https://www.ohnocrypto.com
Biraajmaan Tamuly, Khareem Sudlow
