Bitcoin is able have some strength in the 24 hour period since it fell to $18,000, bringing the crypto market to its knees. As Tuesday trade day begins, bitcoin has risen to $19,000. However, bitcoin appears to have formed support at $19,200. Market participants are still questioning if this was a false recovery.
Is the Onslaught over?
Bitcoin’s move above $19,000 has been a 4% increase over the past 24 hours. The market’s tendency to take out losses after massive ones continues to raise concerns about the potential for a downturn.
The digital asset continued to indicate sell pressure in the past week. This is exactly the same as what happened in 2020 just prior to the bull rally. However, it’s important to remember that digital assets had experienced a severe bear market before the bull rally. This primed them for recovery.
Bitcoin is currently in its bear market phase. This means that buying pressure won’t lead to any significant growth. This was also true in August. Even though the accumulation trend had increased, bitcoin could not break $25,000.
BTC settlements exceed $19,200| Source: BTCUSD on TradingView.com
Market movements suggest that bitcoin could form a bottom. This would indicate that buying pressure may be an indicator for a bull rally. However, the market continues to be volatile and is unlikely to experience a substantial upwards swing.
Bitcoin and the Weeds
It is not yet clear that bitcoin will reach its bottom, but there are strong opinions. These analyses were based on previous bear and bull cycle cycles in which bitcoin lost at least 80 percent of its value prior to launching into a bull market. The $12,000 price mark is the lowest point in the bear market.
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Chief Market Strategist at InTheMoneyStocks.com, Gareth Soloway, has also echoed this forecast. Soloway said that he expects the price for digital assets to fall between $12,000-13,000 before the bear markets end. The market strategist points to the dollar’s strength in recent times, which chases investors away from risk assets. “Every uptick in the dollar, you’ll see the opposite occurring in the Bitcoin chart,” Soloway said.
Bitcoin’s price had dropped by about 85% from its all-time high after the last bull market of 2017-2018. Similar results were seen after the bull market of 2013-2014. So given bitcoin’s likelihood to stick closely to historical patterns, Soloway’s prediction of a $12,000-$13,000 bottom price remains a viable forecast as it would constitute an around 85% drop from bitcoin’s all-time high of $69,000.
CNBC feature image and chart by TradingView.com
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