Bitcoin Due For Pullback
Josh Olszewicz, a crypto analyst at Brave New Coin, suggests that Bitcoin (BTC) may be in for an impending drawdown. Speaking to Forbes’ Benjamin Pirus in a podcast, the popular trader noted that Bitcoin has reached a point where the pullback that is on its way will “just be super painful.” He adds that BTC should’ve pulled back for a while now.
Olszewicz looks to the fact that on high time frames, Bitcoin and indicators pertaining to the asset are showing bearish divergences and overbought signals, hinting that bulls are losing control of the cryptocurrency wheel. Indeed. Per previous reports from Ethereum World News, the analyst recently explained that Bitcoin was trading over 30% a key band of its Ichimoku Cloud, an indicator meant to show trends, key support and resistances, and momentums.
The last time such a delta between the band and Bitcoin was seen, BTC spiked. The thing is, that’s when the price was 30% under the Kijun band. So if history is of any indication and if the analysis of the Cloud works for overbought and oversold assets, BTC could soon shoot lower, falling closer to the Kijun band. But, there might be some hope, as 2017 saw Bitcoin trade over 30% above its Kijun band for weeks on end, giving BTC the chance to run further from here before a potential drawdown.
Some agree with this sentiment. In a recent Twitter thread, Bitcoin Jack of Bravado broke down his thoughts, explaining why Bitcoin’s upside is limited and why the $4,900 to $5,125 region will act as somewhat of a price “magnet” in the coming months.
Firstly, Jack admitted that Bitcoin, more likely than not, will not see newer lows in this cycle, looking to the fact that from a high time frame point of view, the bull run is most likely on.
Yet, he notes that Bitcoin is most likely topping out, looking to the fact that when BTC moved above $8,300, that marked the fifth portion of the Elliot Wave pattern, and that the $8,800 resistance hasn’t been decidedly closed above. Bitcoin’s chart on shorter time frames also looks somewhat bearish. In fact, BTC has just broken below a descending channel and a medium-term trend line and has topped twice at $8,900.
Still In a Bullish Trend
Despite the fears of a drawdown, Olszewicz explained that Bitcoin is still likely to hold in an overall bull trend. He suggested that as long as the asset remains above $6,400 the 200 exponential moving average on the daily, and as long as Bitcoin’s chart is still seeing a golden cross, BTC will be in a bull trend.
Yet, he did note that if Bitcoin falls under $5,200, which is where BTC reached in early-April, it may be fair to reevaluate the state of the cryptocurrency market.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash
