Bitcoin’s (BTC) volatility seems to be back as the price just dropped 4.89% after touching the daily high at $11,909 to as low as $11,322 in a few hours. The bulls lost momentum near the $11,800 region and the price fell to retest the support at $11,400.
The pullback came amidst reports of joblessness claims dropping to 1.2 million, while U.S. markets started the day off in the red but recovered by the end of the day with Dow and S&P 500 gaining 0.7% and 0.17% respectively.
However, the move wasn’t a surprise for traders as it is quite common for BTC to retrace back to validate that a previous resistance level is acting as the new support.
As of now, BTC is forming a symmetrical triangle on the 4-hour chart and a bullish breakout could be expected if the bulls are able to push prices above the $11,800 resistance.
At press time, BTC is trading at $11,690 but if the price drops below $11,500 and the $11,400 support range, the asset would be heading back to $11,200.
However, it would continue to maintain the pattern of higher lows as long as the price holds above $11,100, continuing the upward rally.
On a weekly time frame, if the price holds above $10,800 the bulls would remain in control.
Traders bet on Bitcoin
Analysts continue to remain bullish considering BTCs recent price action, with prominent trader PentarhUdi, who accurately predicted Bitcoin’s $3000 low in December and the bounce to ~$15,000 in mid-2019, now stating that asset could surpass $20,000 in the next few months.
With reference to the above BTC/USD chart on Tradingview, PentarhUdi wrote:
“This is not more than 4 months prediction, as I spotted new bullish channel. According to my idea price may reach ATH area in 2 months with following some triangle-like consolidation.
For EW lovers – I think price is in starting local III wave with all 3rd-wave-specific bullish drama around. Wavelength is around 2 months.”
Mike Novogratz, a former Goldman Sachs partner and current CEO of Galaxy Digital, voiced similar opinions, noting scarce assets like BTC will soon get a major boost as due to the money printing saga of the Federal Reserve.
In a CNBC interview last week, Novogratz said:
“Great bubbles usually end with policy moves… It doesn’t look like the Fed is going to raise rates … The liquidity story isn’t going to go away. We’re going to get a big stimulus. Bitcoin still has a lot of retail interest in it. A lot of that retail interest shifted to the story stocks, to the tech stocks, because they were just more fun … Yesterday you saw a lot of money shift back over to gold and bitcoin.”
Meanwhile, Bitcoin’s active supply just hit a 3-year low at 1,371,903.365 BTC, according to crypto research firm Glassnode. Per the basic principle of supply and demand, lower supply tends to indicate the growing scarcity of an asset and is considered a highly bullish sign.