Analyst: Bitcoin Could Return to $9,900, Fall 15%

Bitcoin in Precarious Territory

Last week, Bitcoin (BTC) bulls suddenly lost steam, resulting in a $4,000, 30% collapse for the leading cryptocurrency. While this made countless analysts bearish, with some even calling for a return to $6,000, BTC bounced back. Hard.

In the day or two following the move to $9,700, Bitcoin shot back up to five digits, even flirting with the $12,000 resistance for a short period of time. This, like the previous strong move, has resulted in a sentiment change market-wide. In fact, some optimistic commentators are already eyeing $20,000, expecting for the cryptocurrency to breach that level now that they see a deep correction is off the table.

According to Filb Filb, a popular analyst, however, this hope may be materializing a tad too early. In a recent tweet, he explained that Bitcoin is seemingly in a โ€œspot of a botherโ€. What he is referring to is the fact that Bitcoinโ€™s four-hour chart is currently exhibiting an inverted Head & Shoulders formation, all while BTCโ€™s price action has been resisted by a โ€œsloping bearish necklineโ€.

Filb notes that historically, such patterns on the charts of assets see bulls fail to step up to the plate. An excerpt from a technical analysis book that Filb cites reads:

A โ€œdroopingโ€ neck line on a Head and Shoulders top is usually indicative of rapidly developing technical weakness. Such a drooping line, of course, produced when prices drop down from the head to a lower level than the neck base previously formed between the left shoulder and the head.

While he didnโ€™t convey an exact price prediction, he did note that the price action from the local top of $13,800 to now looks eerily like โ€œthe bottom bounce from $3,000โ€.

If the same price action plays out on the current chart (fractal), Bitcoin will trade between $10,700 to $11,000 for the next few days, collapse to $9,900 by mid-July, and then recover into August.

Funnily enough, some have taken the same technical pattern on Filbโ€™s chart to mean something bullish. As Nunya Bizniz points out , the pattern, if broken above, could result in Bitcoin price appreciation to $14,000, not a depreciation to $9,900. And while this seems unlikely, especially considering Filbโ€™s harrowing comment, there may be fundamental reasons to suggest BTC will head higher shortly.

These reasons include the assetโ€™s correlations with gold & safe-haven currencies, implying that Bitcoin is a proper store of value; a series of crypto services providers securing licenses for Bitcoin futures; an increase in institutional investment; and similar FOMO caused by an influx of retail hype and mainstream media coverage.

Photo by Noah Silliman on Unsplash



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