Bitcoin Correction Potential
The world’s leading cryptocurrency by market cap has been trading well in recent weeks. The uptrend has officially brought to a close the ‘crypto winter’ after posting consecutive months of growth.
However, after trading up to the mid-$8,000s in recent weeks, the cryptocurrency price has pulled back to $7,753 at the time of press. Now, some analysts think traders could be in for more of a bumpy ride over the next few days.
Coindesk analyst Omar Godbole said the short-term outlook had turned bearish following Tuesday’s trading. This could see BTC pare back as far as $7,000 over the coming days.
“Bitcoin’s short-term outlook has turned bearish, courtesy of Tuesday’s UTC close below the 30-day average of price. A key daily and 3-day chart indicator is also indicating an end of the price rally from December lows. Hence, BTC’s $400 recovery from 2.5-week lows hit on Tuesday could be short-lived.”
Bitcoin Price Fall Risks
Godbole said bitcoin should rally to $8,383 to invalidate the pattern and set it on a path to further gains.
“Prices risk falling to $7,000 over the next few days. The hourly chart indicates the ongoing recovery may be extended to $8,000 before a potential slide toward $7,000. A UTC close above the 10-day price average at $8,383 is needed to invalidate the short-term bearish setup.”
The news means bitcoin traders should be cautious over the next few days, amid risks that bitcoin could continue to slide. However, the longer-term trend is still one of optimism in the market. Already in the first half of 2019, the cryptocurrency has recovered a health portion of the growth lost over the past year.
Bulls with the stomach to hold may be OK. Analysts are expecting bitcoin to continue its upwards trend over the remainder of the year, all things remaining equal.
Nevertheless, the next couple of days are likely to be choppy. Therefore, new bitcoin investors should look to choose their moves wisely ahead of any substantial BTC investment.