A pair of crypto analysts say Bitcoin’s pullback is not over yet.
Global macro trader and cryptocurrency strategist at LMAX Group, Joel Kruger, says it’s clear the largest cryptocurrency remains vulnerable. In the current global economic climate, he believes Bitcoin may plummet to as low as $6,000 before finding stability.
“Bitcoin has had a run-up in 2020. We’ve seen a pullback here. There’s a lot of support that we see down towards the $6,000 area and it’s very possible that we could see a pullback down to that level before the market, I suspect, will be very well supported. On the top side, we have $10,500, which is where we stalled out, and we need to establish back above that level for any kind of confirmation or suggesting that we could start to see a breakout.”
Despite the sharp correction, Kruger says it’s important to analyze Bitcoin’s price action compared to its typical volatility.
“If we look at just percentages in performance last week in the market – so we look at the performance of gold, which fell about 4.5% last week, then we look at the equity market performance. The S&P 500 was down about 10% last week, and Bitcoin was down 12%. But that’s very misleading because what we need to do is look at the price action relative to the volatility of each market.
When we look at it like that, everything changes. Bitcoin last week only moved 1.5 or 1.6 times its average weekly range. So a little bit more than its weekly range, but not significantly. This compares to the S&P 500 moving 4.5 times it’s average weekly range and gold moving about 3 times its average weekly range. So when you look at it relative to their average ranges on the weekly, Bitcoin’s just kind of business as usual – a little bit more, given all the volatility, but the least of these markets.”
Trader and analyst Joe Saz also believes Bitcoin’s reversal is not over yet. Saz says the fact that BTC bulls failed an attempt to lift the leading cryptocurrency above $8,700 over the weekend does not bode well for the short term.
“These lower highs are killing us and this failed breakout is a sign that there’s a lot of weakness from the bulls.
I’m not very pleased with what I’m seeing. In fact, I hate to put this figure on the table, but I think $7,600 is very possible.”
Meanwhile, traders Josh Rager and Cantering Clark are tracking the order books to gauge what lies ahead. Clark says BTC may be coiling up for a bounce if it can stay above $8,600. Bitcoin is currently at $8,665 at time of publishing, according to CoinMarketCap.
$BTC One of the few things that will change my mind about bias is order flow
Got in a long at $8550, with stop loss
If this fails, will stagger longs in $8200s
Followed by $7900s
That's my plan https://t.co/lgRuWKpSzk
— Josh Rager 📈 (@Josh_Rager) February 28, 2020
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