Analysts Divided Over Short-Term Future Of Bitcoin
Bitcoin’s chart is currently expressing signs of a bull market, according to Bitcoin Bravado analyst Jack. In a recent Twitter post, the technical chartist noted that BTC’s one-day chart is currently in the midst of an impeccable “ascending broadening wedge” pattern, which is uncommon in bear markets, and normally only seen in bull markets.
If the pattern plays out how it does in technical textbooks and during the S&P 500’s recovery in 2009 and 2010, BTC could reach a high of $6,250, before breaking below the wedge’s bottom bound to reach $4,800.
From there, Jack suggests that he is 80% sure that there will be a “continuation of the bull trend,” meaning that Bitcoin could head dramatically higher in the months to come.
In another tweet , he suggested that Bitcoin is soon to start moving soon. he remarked that open interest in BitMEX’s Bitcoin futures contracts are currently reaching highs not seen since March 30th, prior to BTC’s move past $5,000. He hinted that with the BitMEX funding rate currently dictating that short holders pay longs, a chance of a short squeeze, meaning a BTC spike, is likely, echoing a point made by Alistair Milne.
Some aren’t too sure that a bull market is inbound, however.
In a recent Trading View analysis, Magic Poop Cannon, a popular trader that called Bitcoin’s decline to $3,000 in late-2018, noted that for Bitcoin’s entire history as a liquid, tradable asset, it has held in a rising arch channel. He notes that prior to every bull run, BTC touched and traded around the bottom bound of the channel. In the current cycle, however, Bitcoin has yet to reach that level. And as such, Magic concluded that for a bull run to begin, BTC has a high probability of returning to the bottom of the channel, which could be anywhere from $3,000 to $4,000.
Further backing this call, Magic looked to the popular Network Value to Transactions ratio (NVT). The analyst notes that each and every time that the NVT reads as it does now, it acted as a “powerful sell signal.” Per Magic, if historical precedent is followed, Bitcoin will fall to its 0.618 Fibonacci retracement, which sits around $4,100. He adds:
Most NVT weekly sell signals sent BTC even deeper than that. So, I think it is very realistic, from a technical perspective, that Bitcoin could fall dramatically… Did I mention the weekly 50 EMA (in black) on this chart, which we were just rejected at? Even if we did somehow manage to get above that, there is an ENORMOUSLY POWERFUL CEILING OF RESISTANCE all around 6000!
Others have expressed a similar sentiment. Willy Woo, who recently revealed that he is 95% that a final long-term floor for the crypto market was hit in December, noted that his Network Value to Transactions (NVT) Caps indicator, which aims to determine Bitcoin’s velocity of money, is currently looking as it did in mid-2015. If the NVT Caps sees a “fractal repeat,” BTC may near $3,150 (but not fall below) it, prior to embarking on a rally later this year.
Photo by Cristian Escobar on Unsplash
