Ever since Bitcoin (BTC) breached $4,000 a few days back, the market has entered a lull. Cryptocurrencies have held within a tight range, failing to show signs of either a bullish breakout of bearish reversal. Yet, some analysts are starting to fear a short-term collapse, as BTC flip-flops around $4,000 with indecision, a sign to some that a sell-off is in the works.
Luke Martin, better known as Venture Coinist, remarked that if Bitcoin heads higher in medium-term time frames, like the four-hour or one-day, but closes below $3,930, he would start being “bearish short-term.”
Another popular trader going by the moniker “DonAlt” expressed a similar sentiment. He explained that $3,900 is an essential level to watch from his point of view, adding that if it falls under this support, he would expect “$3,500 or even lower.”
Indeed, from a technical point of view, the aforementioned price point seems to have some semblance of importance. Prior to Bitcoin’s most recent move above $4,000, BTC was having trouble breaking past $3,900, holding in that region for nearly around 12 hours. And in a recent rapid sell-off, $3,900 became the level to watch, as the leading cryptocurrency was seemingly on the verge of (yet another) collapse.
Technical indicators around this level have seemingly some level of importance too. CryptoChartsJoe recently stated on Twitter that $3,900 is where the 50 six-hour moving average and uptrend line is currently situated.
While bulls seem to have the upper hand as it stands, some are fearful that BTC breaking under $3,900 is on the horizon, as bulls fail to show signs that $4,400, let alone $4,200 is on the table.
Then again, some have kept their heads up high.
Satoshi Flipper, a well-known industry commentator, remarked that over the past few months, BTC has touched a single resistance line ($4,050) six times. Each time it has done this though, it receded quickly, falling by a number of percentage points to return to a mean. But with the cryptocurrency currently slated to be on track for a seventh touch, Satoshi hinted that there’s a chance it could break through, pushing Bitcoin into a rally.
Sentiment-wise, crypto’s prospects are looking bright too. Ryan Selkis, the chief executive of cryptocurrency analytics provider Messari, remarked that he would be “extremely surprised” if Bitcoin hasn’t found a floor in this bear market. Selkis, a hard-line believer that BTC is best used as a digital store of value, explains that for long-term bulls, waiting to catch the final capitulation event is nonsensical, as the five-year expected value of crypto assets is “25 to 50 times” current prices.
And last but not least, fundamentals. Arguably, fundamentals, or industry developments rather, is the best tailwinds that cryptocurrencies have at the moment. Over recent weeks, Samsung, Facebook, Kakao, among countless other institutions have announced forays into this ecosystem. These moves could spark global adoption, subsequently bolstering the value of BTC through simple network effects.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash
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