Tony “The Bull,” a crypto analyst and the Editorial Director at Bitcoinist, remains bullish despite the sell-off in Bitcoin. He suggests that the ongoing decline could be a dip that sets the stage for a leg up to $45,000 in the coming sessions.
Bitcoin Is Oversold, Will It Recover?
Highlighting candlestick arrangements in the 4-hour chart, the Chartered Market Analyst argues that the current BTC prices are grossly oversold. Drawing parallels with historical occurrences, he points out that the last time Bitcoin was this “oversold” in the 4HR chart, the coin went on to surge 63%.
With Bitcoin currently trading around $27,800, it could roar to $45,000 for a 63% surge if history repeats itself. In this case, the coin will ease past immediate resistance levels, quickly printing new 2023 highs in a welcomed development. Currently, BTC faces strong resistance at $31,800, which was last printed in late July 2023.
Zooming in on the daily chart, BTC has broken below the base of the bull flag. The selling momentum is high in a breakdown, and bears appear to be in the driving seat. Notably, bars are riding the lower BB, suggesting that the dump is stronger and panic could be setting in for holders.
Weak hands, or individuals who can’t withstand the dizzying volatility of BTC, could be unloading and opting for stablecoins. CoinMarketCap (CMC) data shows that USDT’s daily trading volumes are up 45% in the last 24 hours to $31.7 billion.
USDT is the most liquid stablecoin by market cap. However, the sharp shift in trading volumes could be due to Tether’s announcement that it would halt issuing new coins on, among other blockchains, Kusama and Bitcoin Cash. Still, the significance of USDT in periods of uncertainty is clear, as highlighted by rising trading volumes signaling flight to safety.
Will A Spot Bitcoin ETF Trigger Demand?
In a bear breakout formation, BTC could slide to retest immediate support levels marked by the Fibonacci retracement of the June to July 2023 range, in which BTC price action is still boxed. If BTC bears press on, extending losses, the coin may fall to $26,300, the 78.6% Fibonacci retracement level of the recent swing high and low, evident in the daily chart.
While BTC may recover after the current “oversold” conditions, as relayed by technical indicators, the coin needs triggers for bulls to overcome resilient sellers. For instance, approving the first spot Bitcoin exchange-traded fund (ETF) in the United States might catalyze demand, lifting demand as sentiment changes.
Several established Wall Street players, including BlackRock and Fidelity, have submitted applications. The United States Securities and Exchange Commission (SEC) is being closely watched if it would approve the first spot Bitcoin ETF in the country.
Feature image from Canva, chart from TradingView