With all the excitement after Bitcoin hit a 2019 high of $9,000, it quickly went through a dramatic correction that saw the cryptocurrency fall back to $8,200.
The sudden rally that saw Bitcoin surge to $9,000 is explained by top analysts as a fake-out that was gassed by the liquidation of contracts on BitMEX. The sudden fall of the Bitcoin price broke the hearts of many who were expecting the price of Bitcoin to surge north of $9,000 pretty quickly.
The opposite happened when the Bitcoin price fell below $9,000 and hovered around $8,200, in a move that surprised many traders and commentators. According to crypto technical analyst Josh Rager the trend resembled a classic fake-out pattern. Another commentator, James Chen who is the director of trading at Investopedia explained a fake-out as;
“Fake-out” is a term used in technical analysis to refer to a situation in which a trader enters into a position in anticipation of a future transaction signal or price movement, but the signal or movement never develops and the asset moves in the opposite direction”.
Another well-known Crypto trader known popularly as “Mayne” was very emphatic on his position that Bitcoin had to defend its $8,200 low and wander around that support area while gearing up to north later. According to Mayne;
“$8200 level is key for the bulls IMO if it’s lost I think we fall much further. As you can see it has been a very important level for a while. A potential short, not sure if we get it would be a lower high at $8700. If we can regain $8700 I think you get net long,”
These comments came after the price of Bitcoin dropped while its market cap saw a drop of nearly 20 Billion overnight. Following the price slump, another trader remarked that he had no idea of Bitcoin’s next move but he remained supper Bullish because according to him the market was officially bullish.
The latest decline in Bitcoin price led to major crypto assets such as EOS, Litecoin, Binance Coin, Bitcoin cash, Ethereum, and XRP falling like dominos as well. This has called into question the argument that Altcoins were living a charmed life independent of Bitcoin at least according to price.
It’s not all doom and gloom however as the Bitcoin network remains very strong according to researcher Kevin Rooke. According to Rooke, Bitcoin mining difficulty has reached an all-time high this week , indicating that Bitcoin mining profitability is on the rise. This situation is worlds apart from the situation back in December which had miners in a very tough spot after the asset fell to around $3150 a coin.
Following the latest price slump, some commentators are shying away from predictions while others remain positive in their Bullish stance. What is clear though looking at the naked charts is that Bitcoin looks like it’s heading North in the long run, it remains to be seen how the tussle between the longs and shorts will go down though.
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