Don’t Panic, Bitcoin “Nuking” $6,400 Resistance Is Extremely Bullish
Over recent hours, Bitcoin (BTC) has begun to slow, with bullish momentum falling off across the board. Yet, some say it may be a bit too early to call for a doomsday-esque scenario, which sees BTC fully retrace its sudden spike higher.
Bitcoin Moving Past $6,400
When BTC paused at $6,000 just days ago, few thought that the asset was going to be able to surmount $6,400 — a level of utmost importance through 2018, as the cryptocurrency failed to fall below that level for months on end. In fact, it is so essential that it has acted as support on the daily, weekly, and monthly charts. Yet, lo and behold, Bitcoin bulls succeeded, quickly taking control of the wheel to drive BTC past $6,400.
Related Reading: Analyst: Bitcoin is Now Firmly in Bull Market Territory, Which Means Traders Should Start Buying Dips
According to analyst “The Wolf of All Streets”, the fact that Bitcoin “nuked [$6,400] in one shot” is one of the most “powerfully bullish moves” that the asset has ever done in its lifetime.
The $6400 area was the most traded for bitcoin in 2018. There was heavy daily, weekly, monthly supply there – and price just nuked it in one shot. This is one of the most powerfully bullish moves that bitcoin has ever made. pic.twitter.com/ldTtoOZkYE
— The Wolf Of All Streets (@scottmelker) May 11, 2019
This alone, in the eyes of some, assures that if a pullback ensues from Bitcoin’s recent $7,500 peak, $6,400 should hold up fairly well, and may act as a local bottom. This isn’t the only thing, however, making BTC look extremely bullish. Last week, Fidelity Investments was revealed to be soon launching a trade execution service for its tens of thousands of institutional clients, a purported 58% of which are somewhat interest in cryptocurrency and blockchain technologies.
Even more importantly, TD Ameritrade and E*Trade, two American brokerages with a large retail following, are expected to launch spot Bitcoin and Ethereum trading in the coming weeks, setting the stage for a massive capital inflow.
The Case For A Drawdown
There is a strong case for a drawdown, however, even one that goes below $6,400. Trader Cantering Clark explains that while the ongoing move seems “incredibly bullish”, BTC is still sitting under resistance, and is too far above its 20-week moving average. The 20-week moving average, according to Clark, has and is likely to continue to act as Bitcoin’s center Bollinger Band, meaning that it should return to that level’s vicinity in the near future.
He explains that as it stands, BTC is a “good three standard deviations from the norm,” with this move being fueled by retail shorts. This hints that Bitcoin may soon see a retracement, returning to more organic and sustainable levels as buying pressure slows in the coming weeks.
And as NewsBTC suggested in a previous report, history rhyming would see BTC fall by 20% to 25% here, before entering the second phase of accumulation.
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