Bitcoin Analysts Give 3 Reasons BTC Price Below $20K Could Be A ‘Bear Trap’
Bitcoin (BTC) recovered above the $19,000 mark on September 20, a day after falling to a three-month low.
Bitcoin Struggles After Falling Below $20K
On the daily chart, BTC price rose from $18,255 to $19,650. This 7.5% price rise mirrored similar upward movements in the stock market, suggesting that investors have come to terms with another significant rate hike from the Federal Reserve expected on 20-21. September.
Opinions differ on how long Bitcoin’s rebound will last. Independent market analyst Jonny Moe emphasized that BTC’s ongoing price action is similar to its sideways consolidation moves at the beginning of this year.
In other words, Bitcoin’s current price pullback around the $20,000 mark does not make a long-term bull case.
This is definitely still lurking out there $BTC pic.twitter.com/UkJ4s312zS
— Jonny Moe (@JonnyMoeTrades) 19 September 2022
Rudy Takala, former Fox News host and opinion editor at Cointelegraph, also warns crypto traders to prepare for more “dark times” due to worsening economic conditions globally.
On the other hand, some analysts believe that Bitcoin is staring at a strong bullish reversal in the time ahead. Let’s take a closer look at the three optimistic market outlooks.
Bitcoin Prints ‘Bullish Hammer’
Bitcoin’s September 20 candlestick is a bullish hammer, suggesting weakened downside momentum, according to pseudonymous analyst Trader Tardigrade.
A bullish hammer candlestick is formed when the asset falls significantly lower from its opening value but recovers to close close to the same level. Traders see the hammer as a sign of bearish rejection, given its history with previous market bottoms.
Trader Tardigrade applies the same theory to Bitcoin’s recovery move on September 20, noting that its bullish hammer could usher in a reversal.
#Bitcoin updates:
On the daily chart, a “BULLISH HAMMER” candle was pressed, which could give us a reversal.
BULLISH characteristics:
❇️ Long lower wick
❇️ White light
❇️ Low during previous turn lowThis indicates a strong price rejection below the candle.#BTC #Cryptos pic.twitter.com/8TkfoegZrb
— Trader Tardigrade (@TATrader_Alan) 20 September 2022
Pi-Cycle bottom
Another technical signal that expects Bitcoin to recover strongly is the Pi-Cycle bottom.
Specifically, the open source indicator tracks two long-term simple moving averages (SMA): the 471-day SMA and the 150-day EMA. History shows that Bitcoin price bottoms for the market cycle when the 150-day SMA crosses below the 471-day SMA.
Meanwhile, the price is headed for a strong bullish reversal in the days leading up to and after the 150-day SMA closes above the 471-day SMA. Pseudonymous Analyst, Titan of Crypto, highlighted that Bitcoin is looking at a 150-471 SMA bullish crossover sometime by 2023.
“The first crossing happened in July,” he noted, adding:
“Second crosses have yet to happen. Reversal may be closer than we think.”
Wyckoff cycle
Aurelien Ohayon, CEO of the investment strategy company XOR Strategy, expects Bitcoin to reach $45,000 in early 2023, arguing that the BTC price has followed the popular Wyckoff Cycle pattern.
Related: ‘FED sledgehammer’ will further hit BTC, ETH prices – Bloomberg analyst
A Wyckoff cycle has four phases: accumulation, markup, distribution and markdown. After the markdown phase, the cycle repeats with the accumulation phase, which, as Ohayon points out, is the case with Bitcoin’s ongoing price rebound.
“Bitcoin is entering the final bullish phase of the Wyckoff cycle,” the analyst concludes.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
