In an unexpected twist of events, the Bitcoin market appears to have shrugged off the recent surge fuelled by the Grayscale news. The Bitcoin price, in a surprising display of volatility, has seen a rapid reversion, completely obliterating the gains that had earlier ushered in a wave of investor optimism.
As the crypto world watches with bated breath, the question remains – Where does Bitcoin go from here? This story unfolds as we delve deeper into this fascinating roller-coaster of cryptocurrency trading. Stay tuned.
Previous Bitcoin Price Analysis
Bitcoin had formed a bearish flag, a bearish chart pattern indicating a potential continuation of a downtrend, and was anticipating a further decline. The short-term call from the previous week had proven to be a massive success. However, this week some good news disrupted our previous analysis.
Grayscale Bitcoin Trust managed to score one over the SEC in court and was given the leeway to launch its own Bitcoin ETF. On the announcement of the decision, Bitcoin shot up by +6% and touched a local high of $28,152, invalidating the bearish flag that was almost maturing up.
After about a week of ranging, the asset broke out and is now testing the 200-day moving average on the Daily TF.
Bitcoin Price Analysis Moving Forward
Sadly, after the hype had died down, BTC retraced back to its previous price over a span of three days, wiping off all the profits made in the price spike. The price is back in the 25.5k – 26.5k range, giving day traders the chance to make profits scalping the range.
On the macro scale, Bitcoin only managed to test the 200-day MA and got rejected sharply, indicating that bears are still in absolute power. The rally-up can be seen as a move by the market makers to liquidate the Sell Stops that had been building for three weeks at the 26.5k level.
The current Bitcoin chart should have traders worried and cautious. Bitcoin is back in its previous position of no major support (at least until $20k).
For short-term traders, the previous three days’ price action has created a supply zone at the $27,300 level. Currently, the price of BTC sits at $25,994. Smart Money may want to drive the price up to this price to hunt the liquidity sitting there. With 10X leverage, the +5% move could turn a +50% profit in 2-3 days.
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make investment decisions based solely on what you read here.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.