It’s no secret that Bitcoin has been caught within a firm bull trend throughout 2020, and yesterday’s rally to over $10,000 seemed to suggest that this uptrend has reached a boiling point, with a major parabolic movement looming on the horizon.
It is important to note that BTC has not yet incurred any type of significant correction throughout its rapid rise over the past several days, and analysts are now noting that it may dip to $9,400 before it continues its uptrend.
Bitcoin’s Rally is Strong, but a Major Correction May Ensue
At the time of writing, Bitcoin is trading up just under 3% at its current price of $10,060, which marks a notable climb from daily lows of roughly $9,700 that were set prior to yesterday evening’s major rally.
BTC’s ability to push past the resistance that existed between $9,800 and $10,000 was certainly a bullish sign, and its ability to subsequently hold above $10,000 overnight further supports the idea that bulls have incredible strength at the moment.
It is important to note, however, that Bitcoin has not seen any type of notable pullback over the past few days, and analysts are noting that it may see a notable drawback before it continues climbing higher.
George, a popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, telling his followers that BTC may drop to roughly $9,400 before it finds wnough liquidity to continue climbing higher.
“BTC: What I see on the ltf. Clean liquidity to the downside and untested demand. If we sweep the high on the ltf, I might punt a short and target those lows. Let’s see,” he explained while pointing to the targets on the below chart.
Adding further support for this notion, George also goes on the explain that Bitcoin is currently pushing up against both weekly and monthly resistance, which could mean that it will move to the middle of its trading range.
“I just sold some SPOT BTC at these levels. We’re at weekly and monthly resistance + the 0.75 level of our key range which has proven to be pivotal. Looking to buy back around the mid-range (8800). Invalidation is a clean break above 10.2k (not a wick),” he further noted.
If this turns out, Bitcoin may retrace deeper than $9,400 in the near-term, with its mid-range equilibrium existing at $8,800. It remains unclear, however, if this type of retrace will enough to invalidate the bullish market structure that has been developed by its recent uptrend.