Why Is Bitcoin Suddenly Falling?
Was it possible the jump came too fast? Could the world’s number one cryptocurrency by market cap have suddenly run out of steam, or is this simply a small break in a continued period of ascension?
Joe DiPasquale – the CEO of hedge fund manager Bit Bull Capital – states that the cryptocurrency has likely entered an “overbought” phase, and that too many people have purchased units of the asset in the past few weeks. He also states that the currency will more than likely try to develop a support level at its present trading point before it falls or jumps any further.
The recent rally had also entered into the overbought zone, exhausting bulls and resulting in the current decline… We can expect some consolidation in the current range before technical indicators cool down and bitcoin makes another move above $10,000.
Jon Pearlstone – the publisher of the cryptocurrency newsletter Crypto Patterns, says that the currency is undergoing a period of testing to see if $10,000 is, indeed, an affable position, or if more time is needed for the currency to boost itself and make sure it has the proper footing before it goes any higher. He states:
Studying the daily chart since the most recent lows in December 2019 shows a continued grinding up pattern, and this continues around the $9,500 to $10,500 range. There are bullish signs here but for now, we are testing this key price range that has been hit multiple times over the last 18 months. Our pattern analysis indicates two months of grinding higher is a sign of a growing trading market with a bullish edge (currently) that means a lot more than the psychological price level of $10,000.
Things Will Happen in Spurts
Kiana Danial – the chief executive officer of Invest Diva – states that while bitcoin is still in a solid and bullish position, the currency’s gains will be “more measured” over the coming months, unlike where it stood three years ago in 2017. Bitcoin is likely to experience jumps here and there, rather than all at once. She explains:
Bitcoin has entered a long-term uptrend. However, unlike the bubble of 2017, this time around its gains are more measured. That means instead of just moving up out of hype, short-term investors take the time to profit and get back in for more. This time around, we could see drops to as low as $9,500 or even $9,000 before we see the next move towards $11,000. This is a much healthier long-trend uptrend for bitcoin, which could sustain a lot longer and prevent a catastrophic crash.