Bitcoin attempts crucial breakout to nullify bear market
Bitcoin is in the midst of another gruelling bear market following four clear lower highs and an exponential moving average death cross on the daily chart.
However, this hasn’t prevented Bitcoin bulls from trying to avoid the inevitable descent, with the world’s largest cryptocurrency rallying by an impressive 14% over the past three days.
Bitcoin is now hovering above the $7,450 level of support, which provided a platform for last month’s rally to $10,350.
If it can hold above this level, it could provide a platform for a surge back up to the $8,200 region, although the bulls need a rally above $8,800 to reverse the recent death cross.
The daily death cross has happened just three times since 2014, with both previous crosses in 2014 and 2018 resulting in 60% corrections to the downside.
A correction of that magnitude from here would see Bitcoin plummet to last December’s lows of $3,150, with some analysts like Tone Vays calling for $1,150 price targets.
If pressure from the sell side continues over the coming days, Bitcoin can be expected to retest $6,500 before dwindling down towards the historic level of support at $5,900.
In more positive news, the volume of Bitcoin futures contracts traded on ICE’s Bakkt reached an all-time high yesterday. If this can continue, it could well be the trigger for a reversal in price out of the ongoing bear market.
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