Bitcoin is currently experiencing a downtrend after it broke above $50,000 Monday. Although downward corrections are normal after rallies like this, indicators point towards a bearish bitcoin scenario. This correction should cause the price to fall further. This would mean that Bitcoin will likely lose a significant percentage of its gains last week.
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Even though bearish scenarios may look bad for the overall market, this scenario is likely to work in bitcoin’s favour. Bullish indicators are easier because they indicate an increase in trend. Bearish indicators can also be used to speculate on the movement of the digital asset. BTC is in a bearish situation right now and could see a significant decline.
Bitcoin is expected lose 18%
Current trends, when compared to past bull markets, indicate that a bearish scenario is most likely for the next digital asset setup. This scenario would lead to bitcoin’s price dropping by 18% in the coming week. Lower prices would result in a downtrend floor of $ 41. This would mean that bitcoin would lose more than $ 9,000 from its $ 50,000 high.
Source:| Source: Twitter
A 18% drop in price is significant, but it is necessary to set up a setup that would most certainly send a barrel worth of bitcoin to $ 100,000. These are the reasons for the ambitious price predictions made by analysts in the crypto space. They predict that bitcoin will be worth $ 100,000 by the end of 2018. Investors will have the opportunity to buy the asset if the market gains momentum by falling prices.
Last week, a bullish signal was activated that would see bitcoin’s price rise 250%. The market has seen significant buying pressure from bitcoin hash ribbons.The onlyThis trigger requires a dive. This signal would work best if there was an 18% drop. This is the bullish pattern that saw BTC’s price rise 250% since the last time such a pattern was created.
Bullish setup requires a dip to complete| Source: Twitter
Bullish indicators in the market
Other factors could also play a role in the bitcoin rebound following the decline. The value of the digital asset will rise due to significant buying pressure. A drop in the value of the digital asset will encourage more buying pressure. Investors have the option to buy at a slightly lower price and wait for the next rise.
BTC price drops to $47K| Source: TradingView.com - BTCUSD
BTC holders are also holding long-term, according to the data. This is evident in the fact that short-term holders have fallen to an all-time low. The number of long-term bitcoin addresses has increased. The most popular way to invest cryptocurrency is through diamond hands. Investors consolidate their coins at long term holding addresses, thereby creating scarcity in the market.
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Market sentiment is the last, but not least. Market sentiment was extreme fear for most of the time after the alltime high. Market sentiment has shifted to extreme greed with the recent rally. This is a sign of the increasing buying pressure in the market as investors new and old want to take advantage of the benefits that bitcoin offers.
Featured image taken from CNBC.ca, charts taken from Twitter and TradingView.com