Following the sudden upside movement, technical analysts still generally remain cautiously bearish towards the short term trend of the dominant crypto asset due to its inability to cleanly break out of a key resistance level at $10,850.
Is a move down for bitcoin likely?
As said by technical analyst Eric Thies, throughout the run up towards the 2017 bull market, the bitcoin price frequently experienced pullbacks in the range of 31 percent to 40 percent against the U.S. dollar.
“Bull run in 2015-2017 included run-ups, typically followed by a retrace to touch the top of the prior high. These drops ranged from 31-40%, before rinsing/repeating onward. Looks very similar to what we are seeing now,” said Thies.
Since hitting its yearly peak at $14,000, the bitcoin price has fallen by 25 percent since then to $10,500 and a 40 percent pullback from the yearly high would place bitcoin at around $8,400.
It is uncertain for bitcoin to recreate its formation in 2017 in the upcoming months, primarily because the structure of the market has transformed significantly over the past two years.
More institutional investors are involved in the crypto sector through regulated investment vehicles like Grayscale’s Bitcoin Investment Trust (GBTC) and the CME bitcoin futures market has started to account for a larger portion of the global bitcoin volume.
However, based on technical indicators, some analysts have suggested that despite yesterday’s upside movement, the foundation of BTC for a new rally is considered to be weak,