Bitcoin’s (BTC) road to recovery could be a long one, according to Rob Sluymer, a technical researcher at market research firm Fundstrat Global Advisors.
Per Bloomberg on March 20, Sluymer wrote in a recent note that Bitcoin’s price action was severely compromised by the recent price drop. He wrote:
“The crypto breakdown over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes, whether they were defensive (bonds and gold) or not (equities). […] Lower highs and lower lows are in place for Bitcoin, leaving in a compromised, potentially vulnerable longer-term profile.”
Still, Sluymer admitted that Bitcoin stayed above its 200-week average, which he believes to be a major long-term structural support level for most assets. He also pointed out that this indicator worked for Bitcoin in both 2015 and 2018, adding:
“For now, technically we will again give Bitcoin the benefit of the doubt that it is attempting to bottom but recognize Bitcoin will likely need months of consolidation to repair the technical damage now in place.”
Sub-$5,000 Bitcoin sees major buying pressure
Vijay Ayyar, the head of business development at crypto exchange Luno, pointed out that there was a major buying pressure for Bitcoin under $5,000, which indicates seller exhaustion:
“These prices were potentially below running cost for many miners, and we’ve seen hash rates drop. Miners are also better off just buying Bitcoin at such prices so there could be that aspect as well.”
As Bitcoin approaches the expected halving of the block reward in under two months, Ayyar expects the prices will reach $6,500 again before stabilizing between $3,000 and $6,000 until the next bull run, concluding:
“This is classic redistribution and would be very healthy for future Bitcoin price action and if we were to have bullish momentum going forward.”
As of press time, Bitcoin’s price already broke $6,500 to trade at $6,700, up nearly 20% over the last 24 hours.
A change in Bitcoin’s investor expectations
While the recent cryptocurrency downturn resulted in a loss of confidence in Bitcoin, the rebound that came shortly after shows that optimism has returned among some investors. The founder and CEO of Global Macro Investor, Raoul Pal, recently said that he is quite bullish on Bitcoin after the asset recovered by about 80% in just one week.
As CryptoX reported earlier today, Italy’s Banco Sella recently launched a Bitcoin trading service as part of its smart banking platform Hype.
