Bitcoin and the aggregated crypto market have seen an intense overnight selloff, which comes close on the heels of the bearishness that the markets experienced over the weekend when BTC plummeted below $10,000 in a violent movement.
This downwards momentum, however, may not last long, as one prominent analyst is noting that it is not a high time frame trend change, and that bears are currently fighting against oversold conditions.
If this possibility proves to be valid, then BTC could soon see a sharp upwards movement that is fueled by overleveraged short positions, which could lead the crypto back into the coveted five-figure price region.
Bitcoin Plunges to Key Support as Bears Attempt to Alter Its Market Structure
At the time of writing, Bitcoin is trading down just under 4% at its current price of $9,580, which marks a notable decline from daily highs of just over $10,000 that were set early yesterday.
This recent bounce to $10,000 occurred when bulls attempted to reverse the bearishness that sparked from the crypto’s initial drop below this price level, but the swift rejection that occurred at this level seems to suggest that it has flipped from support to resistance.
In the near-term, however, BTC may start seeing some further upwards momentum, as the oversold conditions on lower time frames show that bears are fighting against a firm uptrend that still remains intact.
Mr. Anderson, a prominent cryptocurrency analyst, spoke about this bullish possibility in a recent tweet, in which he claims that a Countertrend Algorithm shows that this ongoing pullback is both healthy and to be expected.
“BTC Countertrend: This High Time Frame (Daily) Countertrend Algo shows us that a pullback was certainly predictable and due. However, it is likely to be short lived (not a HTF trend change) since Bears need to work fast to avoid a series of oversold conditions on low time frames,” he explained.
This High Time Frame (Daily) Countertrend Algo shows us that a pullback was certainly predictable and due
However, it is likely to be short lived (not a HTF trend change) since Bears need to work fast to avoid a series of oversold conditions on low time frames pic.twitter.com/aZWGn1NoRk
— Mr. Anderson (@TrueCrypto28) February 17, 2020
Holding Above $9,500 Could Allow BTC to Surge to $10,200
In the near-term, in order for the bullish possibility mused by Mr. Anderson to remain valid, it is imperative that bulls hold the crypto above $9,500.
HornHairs, another prominent trader on Twitter, spoke about this level, explaining that a firm defense of it could allow BTC to rally up to $10,200.
“BTC long: Last attempts at longing around these levels. Will continue to punt until 9.5k breaks on a daily close. Playing the trend until it breaks. Another sweep, this time into previous consolidation highs,” he said while pointing to the chart seen below.
Last attempts at longing around these levels. Will continue to punt until 9.5k breaks on a daily close.
Playing the trend until it breaks.
Another sweep, this time into previous consolidation highs. pic.twitter.com/UznHhUeTDQ
— HornHairs (@CryptoHornHairs) February 17, 2020
How Bitcoin responds to the extension of its downwards momentum that was incurred earlier today should provide some insight into its short-term trend.
Featured image from Shutterstock.