Bitcoin's Unexpected Drop Surprises Investors; Analysts Predict Potential Rally
Summary:
Bitcoin's price has seen a 2.5% drop, surprising investors who expected the cryptocurrency to hit new heights after an early week rally to $72,000. Analysts remain optimistic with Bitcoin following patterns similar to previous cycles, predicting a parabolic uptrend once it breaks the 2021 highs. Despite the downturn causing liquidation of many long positions, analysts suggest the overall structure remains bullish and highlight key resistance levels already broken.
Bitcoin's value has dipped by 2.5% today, shocking investors who were expecting the cryptocurrency to reach record-breaking highs after it rallied to $72,000 during the week. Figures from Cointelegraph Markets Pro and TradingView revealed that the abrupt decline in BTC's price from $71,980 on May 21 to a daily low of $67,550 on May 23 caught long term traders by surprise.
“Bitcoin is closely mirroring its path from 2016-2017,” notes independent analyst Jelle, referring to a familiar trend previously seen in BTC's cycles. Jelle predicts that Bitcoin will witness a parabolic surge after surpassing its 2021 all-time highs, with the price potentially hitting $100,000.
Analyst Mags suggests that the recent downturn in BTC could be a misdirection, following a series of events that have been ongoing since it bottomed out at $15,500. "The price levels out inside a certain range for several weeks or months, then it suddenly drops beneath that range, luring in the bears, before quickly rebounding and kicking off another upward trend."
Jelle also observed that BTC's price broke through all key barriers, including the 50-day exponential moving average (EMA), after its recent resurgence beyond $65,000, which sits currently at $64,665. This has resulted in a "hidden bullish divergence," providing further tailwinds for Bitcoin's upward potential.
Matthew Hyland, another analyst, pointed out that BTC's price is on the verge of revisiting the demand zone stretching between $64,000 to $67,000, which serves as the neckline of an inverse head-and-shoulders pattern. He stated, "Bitcoin went beyond the H&S and finished the daily above it. There’s a chance of a $67K retest of this breakout. If it happens, don’t be alarmed. The overall structure on a broader time frame remains bullish, with Bitcoin testing the last restraint prior to record highs."
Renowned analyst Wolf Of All Streets, in his assessment, suggested that bulls would desire to see the $67,000 center of range support area hold. This hints the price will now be oscillating between $67,000 and a record high of $73,835. Anywhere within this range presents a technically favorable purchase opportunity in terms of risk-to-reward.
However, those banking on BTC to bounce back from its present levels were hit hard on May 23, as the decline led to the liquidation of $159.3 million in long positions, contributing to an overall 24-hour wipeout of $227.51 million, as per data from Coinglass.
With the latest downturn, BTC leveraged positions worth $46.75 million have been liquidated in the past hour alone, with $39.6 million of these being longs. Please note, each investment or trading move comes with its own set of risks, and readers are encouraged to perform their research before making a decision.
Published At
5/24/2024 12:15:00 AM
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