- Bitcoin is facing risks of a price correction towards $10,000, according to a TradingView analyst.
- He spotted the cryptocurrency trading near its weekly resistance level, noting that it may amount to profit-taking action among traders.
- Nevertheless, he also asserted that Bitcoin is in a bull market, adding that the price would likely bounce back from its $10,000-lows.
Bitcoin’s efforts to log a breakout move above $12,000 may fail as selling sentiment grows near the said level.
The benchmark cryptocurrency risks breaking lower after retesting the $12,000-mark, says a TradingView.com analyst who analyzed the level for its historical significance as a resistance. He said the BTC/USD exchange rate is near its weekly price ceiling, adding that any efforts to push the pair above it is a bad strategy.
“Whether Bitcoin has the momentum to break above $12,000 without longer consolidation, I have no idea. But, buying at the current price is certainly not the best action to take. [One] should always buy at pullback or on the consolidation breakout,” the analyst wrote.
Bulls Playing a Blind
He concluded after analyzing three typical trading behavior as Bitcoin trades a hundred dollars below $12,000. Either a trader is opening new long positions near the weekly resistance, or s/he is shorting the rally with risky leverages – a “revenge” for missing out the Bitcoin’s second-quarter bull run.
And then, there is a third kind that is taking selling the top to secure short-term profits. The analyst favored the third strategy, stating:
“In my opinion, the best approach is certainly not the 3x actions mentioned above, but to take some profits off long positions at resistance or perhaps put a trailing stop.”
A Bitcoin Pullback to $10K
The analyst expected the next pullback move to push prices down towards $10,000. He attached a chart that showed the future potential moves for the cryptocurrency.
It showed the bitcoin price attempting a bounce-back towards $12,000 from a so-called “minor support” level. Nevertheless, an extended move to the downside took the rate to an area called “better support.” The range lay in the middle of $10,265 and $9,802.
“Personally, I would only consider once the market touches around $10,200 followed by a change of structure,” the analyst added. “Only then I will buy on the pullback with a target of at least 2:1 risk-reward.”
He further stated that a pullback move might not necessarily end the bull market. Bitcoin may keep growing higher towards $12,000 or beyond. The strategy is only about spotting the change in short-term bias to secure interim gains.
Bitcoin holds a long history of posting 30-40 percent bearish corrections after every parabolic move to the upside. Other analysts also see the cryptocurrency keeping up with its previous trends, especially given the higher bids for safe-haven assets against a falling US dollar and bond yields.
“Selling your BTC now on a 13% pullback is like selling on the red circle on this chart. Insane gains are coming, don’t get shaken out,” said Lark Davis, a cryptocurrency analyst.
Bitcoin was trading at 11,791 at the time of this writing.
Bitcoinist.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube