An analyst explains why Bitcoin is at risk of crashing by $2000 in a few days because it will not hold a psychological support level as we are reading more in today’s latest bitcoin news.
At the lower $13,000 level, the cryptocurrency awaits a major sell-off according to Mark Principato of Green Bridge Investing which is an investment consulting firm in New York. The executive director cited a “potentially bearish candle” which could go in an upside rejection near $13,363 to justify the downbeat outlook. He provided more evidence for the fractals which shows that the traders react to the formation of bearish and bullish pin-bars as of late. Bitcoin hit two bullish candles with downside rejections close to the $9800 in September 2020 and the $10,500 in October 2020.
The crypto generated two longs and reached new upside targets near the $11,600 and the $12,300 as well. It achieved the third target at $13,260 from the second long trade. The profit targets were strategically distributed between the low $11,000 and the lows $13,000 level according to Principato. Based on the price proportions, these are the locations that are vulnerable to bearish price action.
The analyst added that Bitcoin is at risk of dropping by $2000 and that he is awaiting a retracement from the lower $13,000 levels before increasing the bets on the fall to the $11,600 and the $12,300 range. Based on where BTC is trading at the time of writing, this is about a $1,500 and $2000 downside correction. The bearish setup has a better likelihood of concluding whether the BTC price achieves stability in the $11,600 and the $12,300 range. Mr. Principato stressed two factors which could ensure a price rebound despite the drop of $2000. First, the trading area as support, second, the forming a bullish pin-bar where the candle wick with a downside bias faces a momentum rejection:
“Once we have that, we can measure RISK and will be prompted to share a new swing trade idea. How long can this process take? A few days to a few weeks. Either way, we wait.”
The cryptocurrency shows demand is near the $11,600 and the $12,300 area while CEX.io Executive Director Konstantin Anissimov noted:
“Bitcoin has brought a lot of attention to the crypto market. As publicly traded companies continue adding this digital asset to their portfolio to hedge against potential risks, fewer tokens are being left in exchanges. The increase in scarcity is a very positive sign since it indicates that there is less BTC to sell.”
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]