Bitcoin (BTC), the largest cryptocurrency in the market, has been trading sideways since experiencing a drop of over 5% on Monday. Despite this decline, Bitcoin has found support at $27,200, preventing further drops that could potentially jeopardize the next bull run of the leading cryptocurrency.
However, many investors wonder whether Bitcoin will show any signs of recovery shortly. Will the cryptocurrency market see a resurgence of bullish sentiment, or will the current bearish trend continue?
Bitcoin’s 70-Day Correction, Is May 19th The End Date?
Jesse Olson, an experienced cryptocurrency analyst, has recently shared his insights on Bitcoin’s performance since the bottom. According to Olson, Bitcoin has experienced two major breakouts since its lower lows, with the first resulting in a 54% gain and a subsequent correction of 22% that took 70 days from a pivot low to a pivot low. The second breakout has resulted in a 58% gain, followed by a current correction of 13%.
However, Olson points out that Bitcoin’s price could reach the third target if the second breakout experiences a -22% correction. He also notes that if it takes 70 days from pivot low to pivot low, this correction will last until May 19th. It’s important to note that these scenarios won’t be the same, but higher time frames are still bullish.
Furthermore, if Bitcoin fails to hold its current trading level at $27,400, it risks losing its 50-day moving average. Despite this, the cryptocurrency’s biggest support floor is still thousands of dollars below its current mark, at $24,600, noted by the yellow line below (200dMA). According to Jesse Olson’s analysis, this level would represent one of the three targets if the decline continues.
The cryptocurrency market has been characterized by prolonged volatility suppression in recent days. According to the analysis firm King Fisher, this is causing a sense of “pent-up energy” that is expected to be unleashed. Signs show that the market is setting up to hunt x20 leverages, which has caught the attention of the analysis firm.
King Fisher’s analysis suggests that the current calm in the Bitcoin market may be the calm before the storm, with a potential surge in volatility looming. Furthermore, per King Fisher’s analysis, the cryptocurrency market is currently experiencing a short ratio hovering around 60-70%, indicating a potential short squeeze.
In addition, motivated sellers who are in a rush to convert their assets into cash are appearing on the scene, potentially missing out on potential upside gains. One key player in the recent marginal seller in the Bitcoin market could be linked to Digital Currency Group’s (DCG) potential sell-off of some assets to restructure its financial plan to pay to its subsidiary Genesis.
Meanwhile, the open interest (OI) in the Bitcoin market remains fairly stable, with many investors waiting for a settlement or locking in synthetic USD. This suggests that many investors are cautious, waiting for more certainty before making any major moves.
Despite the uncertainty, many experts remain bullish on the long-term prospects for Bitcoin and other cryptocurrencies. With increased adoption and institutional investment, the cryptocurrency market will likely continue to play a major role in the global financial landscape for years.
Featured image from Unsplash, a chart from TradingView.com
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