From the $8,800 lows seen on Thursday, Bitcoin has registered a healthy rebound, recently retaking $9,200.
While this bounce off the lows has made many traders optimistic, the cryptocurrency remains on the edge of a cliff, a new analysis suggests. Thats to say, should prices fall or stagnate from here, BTC may find itself in a serious downtrend.
Bitcoin Must Hold Low-$9,000s
For the past eight weeks, Bitcoin has been in an uptrend from the $3,700 capitulation lows experienced in March. But with the ongoing stagnation in the low-$9,000s, a top analyst has begun to question the efficacy of the bull trend.
Steady, reliable trend… they all break down sooner or later. This ones showing subtle signs of weakness creeping into the HTFs, he wrote in reference to the chart below, which shows that Bitcoin is about to break below a key trend indicator, which supported the uptrend over the past two months.
Bitcoin price chart from crypto trader Stackin Bits (@Stackinbits on Twitter). The chart shows that the cryptocurrency is on the verge of losing a key support level.
The level that Bitcoin must hold, according to the indicator is ~$9,100, as it would confirm that the medium-term market structure remains bullish.
Bullish Factors Remain
As Investopedia describes, a golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. In this case, BTCs 50-day simple moving average just moved above the 200-day simple moving average for the second time this year.
As I analyzed earlier this year, this could be a precursor to parabolic gains in the coming months and years.