Graphic analysis experts point out that Bitcoin’s bull movement could be a trap and that on-chain data reveals that it’s easier for BTC to fall 10% than to cross the $50,000 mark in the coming days
1. Graphic analysis experts point out that Bitcoin’s bull movement could be a trap
2. On-chain data reveals that it’s easier for BTC to fall 10%
3. The key level to watch for a potential bitcoin breakout is $10,500
4. A move below $10,000 could trigger a further sell-off in BTC prices
5. The next key support level for bitcoin is at $9,200
While the price of Bitcoin (BTC) has followed in a bullish pattern since it fell below $30,000, graphical analysts point out that the move could be a trap and that on-chain data reveals it’s easier to BTC will drop 10% of it to surpass a $50K mark in the next few days.
One such analyst is trader Michaël Van de Poppe, who points out that Bitcoin is still looking to turn $45,000 into solid support and that as the BTC crosses the $47,000 mark it sounds like a wake-up call.
“If Bitcoin continues its bullish move into a resistance area above $47,000 this weekend, it will likely be a trap. However, if after the weekend Bitcoin will continue its bull movement and thereby keep its daily value in the positive field above $47,000 then this will set up a legitimate bull move that will easily go over $50 thousand”, he said.
In the same vein, FXStreet analyst Akash Girimath points out that Bitcoin price has been struggling with the $46,000 resistance level for about four days, but has failed to break it.
However, although it crossed this mark over the weekend, only a decisive close of the daily candlestick will confirm the turn of this barrier to a support level.
“But regardless, investors can expect a small pullback to emerge here due to the extent of the rally, which originated about 23 days ago on July 20th. This correction will allow bulls to regain strength and board marginalized investors to kick-start a new leg up,” he points out.
It won’t fall below $40,000
Girimath also points out that the drop is unlikely to take the BTC below $40,000 again, as support levels at $41,333 and $40,550 are the contenders likely to absorb the wave of selling pressure.
Another data pointed out by the analyst as an indicator of low in the BTC price is “30-day Market Value to Realized Value, MVRV” (market value model for value realized in 30 days, in free translation) which reached 20%.
According to him, this indicator is used to determine the average profit/loss of investors who bought BTC in the previous month. Currently, 20% of investors are holding profitable trading and may post these gains, pushing the BTC down.
Thus, he points out that this fundamental index saw a 20% increase on March 13, after the BTC rose from $47,555 to set a new all-time high of $61,243. This sudden increase in MVRV resulted in a $10,000 drop in BTC price over the next two weeks.
“Although a similar move may not occur, investors should be cautious and wait for a small correction to occur,” he points out.