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NEW DELHI: Bitcoin has been on a winning three-day run, gaining nearly 10% since Tuesday’s sale. Experts, however, believe the crypto market is still not out of the woods, and the world’s largest cryptocurrency may once again hit the $ 20,000 level.
Bitcoin traded 1.2% higher at $ 33,911 around 4:00 p.m. IST, moving into a wide range of $ 33,300.36 to $ 35,566.50 in the past 24 hours, according to CoinGecko.com .
According to experts, investors should keep in mind that Bitcoin still has a long way to go before reaching a new high. Digital assets are at 47% of their all-time high of $ 64,805, reached on April 14, 2021.
Fear, uncertainty and doubt have pervaded the crypto market amid regulatory crackdown in some countries and concerns about the environmental impact of Bitcoin mining.
For a few weeks now, bears have been claiming that Bitcoin has been in a massive header and shoulder pattern formation. This is a price reversal model that helps investors identify when a reversal may be in progress after a trend has exhausted.
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(Graph source: Kraken)
According to Kraken Research, Bitcoin’s rebound from $ 30,000 to $ 42,000 in January marked “the left shoulder” (see chart). The subsequent surge to $ 42,000, the rise to an all-time high of $ 65,000 and the fall below $ 42,000 represented the “head.”
The last rebound from $ 30,000 to $ 42,000 and back to $ 30,000 made the “right shoulder”. Because the head and shoulders chart pattern is widely viewed as a bearish reversal pattern, many believe that a possible pullback of $ 30,000 will result in a deeper dive into the crypto abyss. With $ 20,000 being the peak of the previous market cycle, most bears haven’t ruled out a return to this historically significant level, ”Kraken Research said in a note.
After bouncing off the $ 30,000 support earlier this week, investors began to wonder if the head and shoulders pattern was no longer valid.
With Bitcoin down more than 50% from its all-time high, others see assets slipping back into the $ 30,000- $ 42,000 range as just an average version of returning to consolidation that will pave the way for an uptrend in bitcoin later this year. While no one knows what the future holds, the longer Bitcoin crosses in the $ 30,000 to $ 42,000 range, the more likely the head and shoulders pattern will play out the way the bears hope. Added the note.
Bitcoin has been trading between $ 30,000 and $ 42,000 since May 19, 2021.
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