Bitcoin has found significant support after Friday’s downtrend and trades at $37,539. A good old weekend pump has brought it back from the mid-$30,000 zone and can now move towards $38,000.
In In the near term, a retest of the $40,000 area seems like the most bullish scenario, but if there is anything similar in price action during these past weeks, it is a lack of volume.
Published by Kevin Kelly, Co-Founder and Head of Global Macroeconomics at Delphi Digital report good On possible scenarios for bitcoin. The analyst said that the leveraged position indicated that a major correction is on the way.
Conversely, BTC price is forming a “major head and shoulders pattern”. Thus, the analyst believes that it is possible for the cryptocurrency to trend down and move back towards the crucial support of $30,000.
If the price of bitcoin is below $30,000, a retest of $20,000 is possible by “traditional thumb rule”. Kelly said:
However, technical analysis is only one piece of the bigger puzzle, especially when it comes to $BTC. Having said that, an extended move below $30,000 could result in more short-term pain for holders; This price level also coincides with the 50-week moving average of BTC.
A 50% drop, as long-term BTC traders know, is not a sign of a guaranteed recovery. Conversely, the price of BTC has corrected 80% and reached new highs.
There have been instances where BTC only found its recovery short-lived after a +40% sell-off. A somewhat recent example is December ’19.
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Furthermore, Kelly said that 85% of BTC addresses are in profit. In the past, gains at the bottom of prices have seen the number of UTXOs decrease by about 50% or less. This suggests further downside in the short term.
In defense of the bulls, long-term holders change their positions and start depositing after the profit-making period. However, as the analyst noted, this metric rarely suggests an immediate change in price action.
Looking at the total supply of BTC held by long-term holders on a percentage basis, we can see that the trend is beginning to reverse. The total BTC supply held by LT holders recently hit a low of 58.5%, but is now above 61%. Again, this is a good sign for the long term.
a major headwind for BitcoinIn the short term, there is a “recession” of central bank asset purchases. In previous cycles, the price of BTC had only peaked with year-on-year (YoY) growth in central bank balance sheets, Kelly said.
Analyst Believes Bitcoin Needs Another Catalyst, a large company adding to its balance sheet, for example, in order for it to regain bullish momentum.. However, he believes that the trend remains positive for the holders in the long term. Kelly concluded:
(…) The long-term chart clearly shows that BTC is still in an uptrend, despite the recent decline. If $BTC has to retest the former support of $20k then we will start getting more worried.