3 things traders are saying about Bitcoin and the state of the bull market
Bitcoin, the world’s most notorious digital currency, has been on a tear over the past several months. But just as quickly, the meteoric rise of cryptocurrencies like Bitcoin has slowed to a crawl.
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Three things we’re hearing from traders about the state of the bull market: #1: “I just can’t imagine Bitcoin losing 70% of its value.” What? Are you expecting another crash? #2: “I’ve lost so many trades because I’ve been too bearish.” Being bearish doesn’t mean you shouldn’t be a trader; it means you need to be a little more defensive and avoid risk. #3: “I’m not sure if I want to hold Bitcoin longer term.” It’s a little early to tell if Bitcoin is a good hedge against inflation.
This week marked the beginning of the end of the 2017 bull market, and the sentiment among traders is that the top is now in place. Traders seem to be more confident about Bitcoin going into 2018, and some are even talking about the possibility of a new bull market.. Read more about bitcoin bullish or bearish and let us know what you think.
Bitcoin’s (BTC) fall below $29,000 on 22. The month of June shocked the markets and led several analysts to speak of a possible drop below $20,000.
Many cryptocurrency Twitter traders have focused on the formation of a death cross on the bitcoin chart as a harbinger of another potential price decline, but analysts with a more contrarian view see this chart pattern as a signal that it’s time to buy the dip.
Latest topic on #BTC deathcross and cycle data analysis.
1) History of #deathcross to #goldencross (in days) + biggest price change since deathcross started:
2011 : 180 D, -59%
2014: 90 D, +83%
2014: 390 D, -63%2018 : 360D, -55%2019 : 105 D, -29%
2020 : 50 D, +66% pic.twitter.com/8JmbtnFLGJ
– venturefoundΞr (@venturefounder) 17. June 2021
The three reasons why some traders still believe bitcoin is bullish are the emergence of a spring phase in the Wyckoff accumulation pattern, steady buying by long-term holders, and the formation of a bear trap in gold similar to moves seen in previous bullish periods.
Wyckoff model talks about the arrival of spring
Wyckoff’s hoarding model has become popular among cryptocurrency analysts over the past month, as bitcoin’s price movement has followed this pattern since the sell-off on the 19th. The month of May followed pretty clearly.
Wyckoff accumulation model – spring test
It looks like it’s possible. We just hit a minimum of $28.8 thousand …. If this model works, we will enter the final phase of recovery growth. We’ll see how it goes. #Bitcoin pic.twitter.com/stuWJRWoL
– Kevin Swenson (@KevinSvenson_) 22. June 2021
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As seen in the tweet above, bitcoin’s drop below $29,000 and subsequent rally above $32,000 has led some analysts to speculate that the spring test from Wyckoff’s Phase C model has been reached. This indicates that the current correction has bottomed and is now entering an erratic upward movement.
If this proves true, BTC will enter the D phase, also known as the bullish phase, when a new uptrend is established and pullbacks to new support open buying opportunities, often seen as buying on the downside.
Related: Bitcoin drops below $36,000 as century-old financial model predicts major BTC collapse
In Phase D, a breakout to new highs is expected as the cycle ends and prepares to eventually restart when the uptrend is exhausted.
Long-term investors remain optimistic
Another positive sign cited by analysts is the continued accumulation of shares by long-term holders.
If you’re scared, think about what long-term #Bitcoin holders are doing right now. Don’t let it get you down, think long term. https://t.co/koCh7pfGf9 pic.twitter.com/bAba8DUWo2
The position of net long-term owners of bitcoin shows that investors began accumulating funds as early as late April, and in May, when the price fell to $30,000-40,000, they began to significantly increase their activity. The chain’s data shows that these investors continued to buy last fall.
This activity suggests that more experienced crypto traders are familiar with bitcoin market cycles and see the current range as a good level to open long positions when fear is high and sentiment is low.
Those who take the risk of buying an asset in a climate of falling prices and sentiment are the most rewarded, and contrarian traders thrive in such situations.
A bear trap hides in the golden section
The third scenario, which some analysts are focusing on, suggests that the current price action has created a bearish trap that repeats the movement of the last cycle, suggesting a pullback to gold’s extension level at 1,618, followed by a breakout to new highs.
From this point of view, the market is currently in the stage of completing the four psychological stages of asset bubbles. Once a bear trap occurs, bitcoin will enter a manic phase where extensive media coverage will attract the attention of new market participants who will then chase the price to ever higher heights based on the illusion that the asset will continue to grow forever.
Earlier claims that bitcoin could reach $200,000 by the third or fourth quarter of 2021 by veteran trader Peter Brandt, who was far from the only one to predict that the value would exceed $100,000 this year, suggest that the long-awaited peak explosion is yet to come.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.The atmosphere in the crypto markets is still one of uncertainty, with the latest flurry of buying in Bitcoin removing its price above $10000, but the fact that the frenzied rally has not produced a breakout higher has not been lost on investors who have been of the view that the stock market has yet to experience a significant correction. And while the market cap of Bitcoin is still around $180 billion, the total market capitalisation of the entire crypto market is up to $401bn, up over $100bn in just one month’s time. This is where the bulls are – or were – coming from, of course, and they continue to make the case that Bitcoin, and the rest of the market, is still in a bull market.. Read more about bitcoin price cointelegraph and let us know what you think.
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