Following several consecutive days of price gains, Bitcoin’s recent price rally has stalled as BTC failed to decisively move above $4,000. It’s no surprise that $4,000 is a strong level of resistance for the cryptocurrency, as it has previously acted as a strong psychological level for BTC.
Now, analysts expect Bitcoin to drop slightly before finding increased buying pressure, which could then help propel it to above $4,000.
Analyst: Despite Bitcoin Price Surge, BTC Still in a Heavy Bear Market
At the time of writing, Bitcoin is trading down marginally at its current price of $3,975, around where it has been trading at for the past couple of days. It is important to note that BTC has pushed up against $4,000 multiple times but has not been able to move above this price level.
Mati Greenspan, the senior market analyst at eToro, recently discussed BTC’s current price action, noting that although the upwards move from the low-$3,000 region has certainly been positive, the cryptocurrency is still firmly in a strong bear market.
“For those who are in from the bottom it’s great because some of the coins like Litecoin have doubled, but we are still in a strong bear market…The big level isn’t until $5,000, which coincides with the 200-day moving average. If we get a strong break of that, that’s when things start to change,” Greenspan said while speaking to MarketWatch.
If Bitcoin is able to continue climbing higher and breaks above $4,000, it is likely that this price will turn into a support level.
Analysts Expect BTC to Drop Further Before Breaking Above $4,100
Because Bitcoin’s recent rally has stalled, analysts now believe that it needs to drop lower before garnering enough buying pressure to push it above $4,000.
Flood, an extremely popular cryptocurrency trader on Twitter, told his over 60k followers that he thinks BTC will drop to $3,800 before continuing to surge, but further adding that a drop below $3,700 would likely lead the crypto back towards its support levels in the low-$3,000 region.
“I’d imagine we see a sweep of 3800 in order for larger players who missed the move to fill up on some longs and reduce some short hedges. This should be followed by a sharp bounce… $BTC seems fairly bullish here, but if 3700 breaks I wouldn’t stay in any longs,” he said.
Josh Rager, another popular cryptocurrency analyst on Twitter, recently said that he thinks Bitcoinneeds to break above $4,100 in order to move firmly into the mid-$4,000 region, but also noted that it could easily see new lows in the coming weeks.
“$BTC – Daily close… Notice the long wick, a nice sign of a slight retrace likely… Would like $BTC push up slightly higher to at least $4100 to mid $4ks would be a nice a target… For traders – this is good volatility… For Holders – you could see new lows in the coming weeks.”
Investors and traders will be closely watching how BTC responds to its current position in the upper-$3,000 region, as it will likely signal whether or not the cryptocurrency is ready to move higher and recover much of its recent losses.
Author: Temitayo Olojede , firstname.lastname@example.org