Over the past few days, Bitcoin has fallen off a proverbial cliff. Contrary to the sentiment of many investors, the cryptocurrency fell through support levels as if they were nothing more than a knife going through hot bricks of butter.
At the drop’s worst on Wednesday, BTC was trading at $8,520 on some exchanges. This means that at the correction’s worst (thus far), Bitcoin had retraced 19% from the local top of $10,500, established on February 13th.
Despite this steep drop from the $10,000 highs, some analysts are starting to explain there are signs that BTC has bottomed, and a subsequent reversal past $9,000 is imminent, noting how Bitcoin is now in the midst of bouncing off key support levels.
Has Bitcoin Bottomed?
Some analysts have made an argument that there are good reasons to believe Bitcoin bottomed.
Filb Filb — the pseudonymous cryptocurrency trader who accurately called that Bitcoin would bottom in the mid-$6,000s and would reverse to the $9,000s by January months in advance — recently noted that he expects for BTC to reverse to the upside around $8,500.
As to why he thinks the price will reverse in the $8,000s, Filb Filb cited a confluence of factors: there exists the 200-day simple moving average, 20-week moving average, 50-week moving average, a “Point of Control of [the] upthrust”, and a CME futures gap all around the price of $8,500.
Also, the stock market has started to see a dramatic increase in volatility, a trend that has historically marked extremely important local and macro bottoms in Bitcoin’s price action over the past five years. The data on this can be seen below.
.@CarpeNoctom suggested spikes in the VIX correlate (spurious?) with Bitcoin bottoms. He’s not kidding.
Times the VIX passed 30 in the past 5 years:
Dec 23, 2018: a week after BTC fell to $3,150
Feb 3, 2018: when BTC bottomed at $6,500
Aug 22, 2015: when BTC bottomed at ~$220 pic.twitter.com/vS7E60rNJp— Nick Chong (@_Nick_Chong) February 27, 2020
Bear Market Just Starting, Others Warn
While there are genuine reasons to believe Bitcoin bottomed at $8,500 in the recent drop, there are some factors suggesting the bear trend will continue.
Per previous reports from Ethereum World News, Mac, a prominent crypto trader, mused that the market structure on BitMEX suggests that “$6k might not have been the bottom after all”:
“Legit boys, $6k might not have been the bottom after all. This OI, Basis, Funding is worse than Oct 2018,” he bearishly noted.
Featured Image from Unsplash
