Bitcoin continues to struggle to climb above the critical support level of $8,000. During the last 24 hours, the Bitcoin price has come down from a high of $8,154 to $7,843. During the entirety of last week, Bitcoin was hovering well above $8,000, giving traders and investors hope that it had found a short-term bottom.
However, much to the disappointment of traders and investors, Bitcoin is now struggling to claw its way back above $8,000. At the time of writing, Bitcoin is trading at $7,965, down by 1.60%.
However, according to some technical analysts, if the Bitcoin price falls further to $6,000, a strong bounce can be anticipated. Since early August this year, the Bitcoin price has dropped from $12,340 to $7,910, recording a loss of almost 35%, fueled by a noticeable decline in the daily trading volume.
As the Bitcoin price struggles to crawl above $8,000, traders are anticipating a drop to the $6,000 region. But, based on historical data, 40% of pullbacks are often followed by extended rallies, they opine.
Bitcoin was trading around $4,000 at the start of 2019, having suffered prolonged losses since it reached a record high of close to $20,000 at the end of 2017. Steady gains throughout 2019 saw Bitcoin triple in price by August, before its latest crash in September 2019 which took it back down again. If Bitcoin falls to $6,000, technical analysts anticipate a strong bounce back.
According to a cryptocurrency trader and technical analyst who operates under the moniker Galaxy, the Bitcoin price has often rallied by more than 100% after a steep pullback in the range of 40% to 50%. In early 2016 and throughout 2017, amidst one of the most intense bull markets in the 10-year history of Bitcoin, the asset more than doubled in value after seeing relatively large corrections.
Bitcoin has seen a 43% pullback since achieving its yearly high of $13,920 in July of this year, and if Bitcoin is in a bull market, an extended rally is likely to occur in the upcoming months. The projection of an extended rally in the medium-term is based on the assumption that Bitcoin currently is in a bull market.
There are many technical analysts that currently perceive the entire upside movement of Bitcoin to $13,920 as a potential fake out rally, anticipating a larger fall and wholly disregarding the possibility of a rally just yet.
However, there exists a strong possibility that Bitcoin could begin to demonstrate signs of an extended rally as it tests the low $6,000 region, an area that has historical significance in terms of activity and buying demand. Hence, although Bitcoin has tended to move upwards in the aftermath of steep short term corrections, given the state of the market, the asset could see further pullback before it begins to recover.