Bitcoin (BTC) slump below $ 29,000 on June 22 shook the markets to a handful of analysts calling for a potential drop below $ 20,000.
Many crypto traders Twitter focused on the formation of a death cross on the Bitcoin chart as a harbinger of another possible drop in price, but analysts with a more opposite point of view see this chart pattern as a sign. that it’s time to buy the dip.
The latest thread on #BTC deathcross and cycle data analysis
1) Historical #deathcross to #goldencross time (in days) + largest price swing since deathcross begins:
2011: 180 D, -59%
2014: 90 D, + 83%
2014: D 390, -63%
2018: 360 D, -55%
2019: 105 D, -29%
2020: D 50, + 66% pic.twitter.com/8JmbtnFLGJ
– venturefoundΞr (@venturefounder) June 17, 2021
Three reasons some traders still see a bullish case for Bitcoin include the emergence of the “spring” stage of the Wyckoff accumulation model, constant buying by long-term forks, and the formation of a bear trap. in the golden ratio which is similar to movements. seen during previous bullfights.
Wyckoff Model Says Spring Has Come
Wyckoff’s accumulation model has been all the rage among cryptocurrency analysts for the past month, as Bitcoin’s price action has followed the pattern relatively closely since the May 19 sell-off.
Wyckoff Accumulation Model – Spring Test
It seems like a possibility. We just hit the lowest low at $ 28.8K… If this model works, we will now enter the final phase of recovery. Let’s see how it unfolds. #Bitcoin pic.twitter.com/stuWJRWWoL
– Kevin Svenson (@KevinSvenson_) June 22, 2021
As seen in the tweet above, Bitcoin’s drop below $ 29,000 and the subsequent rally above $ 32,000 has some analysts suggesting that the “spring test” seen in phase C of the Wyckoff pattern has been met. This would indicate that the bottom is at the current correction and the higher choppy rally now begins.
If this turns out to be true, BTC would enter phase D, also known as the “margin phase”, where a new uptrend is established and “pullbacks to new support offer buying opportunities” are often viewed as opportunities to buy the fall.
Related: Bitcoin Falls Below $ 36K As Centennial Financial Model Predicts Big BTC Drop
In phase D, a breakout to new highs is expected as the cycle completes and prepares to potentially start again once the bullish move is exhausted.
Long-term holders remain bullish
Another bullish sign cited by analysts is the steady accumulation of long-term holders.
If you’re scared, remember what the long-term #Bitcoin headlines are doing right now. Don’t let the fly throw you off, think long term. https://t.co/koCh7pfGf9 pic.twitter.com/bAba8DUWo2
– Yann & Jan (@Negentropic_) June 22, 2021
The long-term net holder position of Bitcoin shows that investors actually began to accumulate again in late April and began to significantly increase their activity in May when the price fell from $ 30,000 to $ 40,000. On-chain data shows that these investors have continued to buy the most recent drop.
This activity suggests that more experienced crypto traders are familiar with Bitcoin market cycles and see the current range as a good level to open long positions when fear is high and sentiment is low.
The biggest rewards go to those who take the risk of buying an asset amid falling prices and sentiment, and these are the kinds of situations opposing traders thrive in.
A bear trap lurks in the golden ratio
The third scenario some analysts are focusing on suggests that current price movements have created a bear trap that echoes a move seen during the last cycle involving a pullback to the 1.618 golden ratio extension level. That will then be followed by a breakout to a new high.
From this perspective, the market is currently in the awareness phase of the four psychological stages of asset bubbles. After the bear trap occurs, Bitcoin will enter the mania phase where widespread media coverage attracts the attention of new market entrants who then chase the price to ever greater heights “based on the illusion of that the asset will continue to rise, forever. “
Earlier calls of the possibility of Bitcoin reaching a price of $ 200,000 by the third or fourth quarter of 2021 by veteran trader Peter Brandt, who was not the only one to predict that its value will exceed the $ 100,000 mark this year, I would suggest that the long awaited blown cap is yet to come.
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