Crypto Price Analysis: Bull and Bear Scenario for Bitcoin
Bitcoin is up by over 200% year-to-date and the leading cryptocurrency has been slaughtering the bears over the last few months. Crypto enthusiasts are feeling bullish and many of them are starting to anticipate a fresh all-time high.
The sky-high optimism is making us a little edgy. Bitcoin has risen so much in a relatively short period of time with almost no retracement. Under such conditions, it pays to take a look at both sides of the coin. In this article, we reveal the bull and bear scenario for the number one cryptocurrency.
The Bullish Case: Bitcoin Shows Remarkable Strength
There’s no denying that bitcoin’s parabolic ascent has been nothing short of spectacular. The unstoppable rise has left those waiting for a massive correction on the sidelines. So far, every retracement has been heavily bought up by the bulls. This forces retail traders to front run each other.
A look at the daily chart reveals that the king of cryptocurrencies is trading within an ascending channel. The bulls are using the diagonal support to drive prices higher. As a result, the cryptocurrency is threatening to breach key resistance of $14,000.
In a bullish scenario, bitcoin would pierce through resistance of $14,000 and retest it as support. Once that level is conquered by the bulls, there would be no resistance that can stop the cryptocurrency from tapping the all-time high of $19,666.
Therefore if you’re bullish on bitcoin, the smart move would be to wait for the digital asset to convert $14,000 into support. Resist the urge to long the market prematurely because the cryptocurrency is showing signs of bullish exhaustion.
The Bearish Case: We Are Closer to the Top Than the Bottom
Bitcoin has never posted seven consecutive green candles on the monthly time frame. The opposite is also true as the cryptocurrency has never printed seven consecutive red candles on the monthly.
Thus if the trend continues, Bitcoin may close July in the green but we can expect August to be bloody. Technical indicators seem to favor this view.
The cryptocurrency is massively overbought on the weekly RSI. On top of that, volume is declining to suggest that a retracement is around the corner. Lastly, the weekly candles have long wicks on top of their bodies to indicate the emergence of sellers.
In a bearish scenario, Bitcoin would fail to take out or even come close to the 2019 high of $13,880. This would ignite a selling frenzy that will likely drive the price down to $9,000. If that price level is taken out, the next crucial support is $7,400. At that price range, the cryptocurrency would have lost over 46 percent of its value from the top.
Looking at both sides of the coin enables you to be flexible regardless of which direction the market takes. For both bulls and bears, $14,000 is the level to watch. Breach this resistance and $20,000 is in sight. Failure to do so and $9,000 and $7,400 are the possible destinations.
Stay patient. Wait for the market to reveal its hand before you make a move.
Disclaimer: The writer owns bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
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