While selling pressure has undoubtedly dissipated, the Bitcoin (BTC) price is still struggling. As of the time of writing this article, the cryptocurrency is trading for $9,550, which is 6.5% lower than BTC was at one week earlier.
Related Reading: Prominent Investor Says Bitcoin Has “Failed” As a Safe Haven: BTC Slips 5%
But, bulls might get some reprieve in the coming weeks. Here’s why.
Bitcoin Price May Soon Bounce
While Bitcoin’s price action seems sporadic, the asset follows distinct trends and patterns. One of these patterns is Bitcoin falling to retest the 21-week exponential moving average (EMA) in bull markets to confirm the uptrend.
As analyst Crypto Michael, a full-time trader at the Amsterdam Stock Exchange, points out, this key moving average acted as support throughout the last bull market after Bitcoin tested it January 2016.
Indeed, as he depicts in his chart below, Bitcoin had a tendency to fall by 33% to 39% to hit the moving average, then rocket back to fresh all-time highs in the coming weeks.
Right now, Bitcoin is around $500 away from the moving average, which is currently 37% lower than BTC local peak of $14,000. History repeating would see BTC fall to flirt with $9,000, then rebound into the end of 2020 and the subsequent block reward reduction.
The two levels to watch;
$9,000 (around) for the 21EMA bounce, which provided support all bullmarket (and first tested in January 2016).
If either of these provide support -> fun times. pic.twitter.com/u6jMJgFOod
— Crypto Michaël (@CryptoMichNL) August 31, 2019
This isn’t the only evidence indicating that Bitcoin’s downtrend may soon end.
In a recent tweet, Willy Woo, a partner at Adaptive Capital, argued that Bitcoin is currently not as bearish as some may expect, pointing out that it has just rebounded off its 128-day moving average, which sits at $9,350.
Kissing the 128d MA is a very good sign. It was overheated till this. People familiar with BTC’s historic personality know that the 128d line needs to be touched many times during a bull market to stay grounded. They present good buying opportunities. pic.twitter.com/1QBo3QjtgD
— Willy Woo (@woonomic) August 29, 2019
While the prominent analyst did admit that the cryptocurrency has been “overheated” over the past few weeks, he notes that its part of BTC’s “historical personality” for it to flirt with the aforementioned moving average “many times during a bull market to stay grounded”.
Related Reading: Crypto Analyst: Bitcoin Indicator Resembles Mid-2016 Bullish Beginnings
Also, analyst Filb Filb reports that Bitcoin’s four-hour chart is looking quite bullish, bullish enough to make him go long on the cryptocurrency.
He notes that the four-hour on-balance volume (OBV) indicator has trended higher, despite a drawn-out downtrend in the price of BTC. This bullish divergence is purportedly the first on Bitcoin’s four-hour chart since the $3,350 price bottom seen in December.
Also, the negative peaks in the four-hour Moving Average Convergence Divergence (MACD) have become increasingly higher, implying that bears are losing steam.
Im Long $btc.
First OBV bull div on the 4hour since $3350.
Live by the sword, die by the sword. pic.twitter.com/6V4nHLDvXh
— fil₿fil₿ (@filbfilb) August 30, 2019
Featured Image from Shutterstock
The post Bounce Off $9,000 Could End Bitcoin Price Correction; Here’s Why appeared first on NewsBTC.