Bitcoin needs a “pullback” before heading higher towards $10,000, historical data suggests, as BTC/USD tests $9,000 support.
Analyzing charts from 2010 onwards, popular trader Josh Rager noted that Bitcoin’s current price behavior has never resulted in short-term gains.
Specifically, Rager said, a rally followed by compression — a period of higher lows and lower highs — has never fostered another rally straight afterwards.
“After reviewing the Bitcoin chart long term since 2010, I struggled to find a rally in price, followed by a compression in the price that immediately continued to rally afterward,” he summarized on Twitter on July 16.
“There was a pullback or wick down before the next rally in price, even if only short term (hrs/days).”
Next BTC rally could top $20,000
His comments came as Bitcoin delivered telltale signs of compression, a pattern which has persisted for several weeks.
As Modern Consensus reported, reliance on the broader stock and other macro markets’ performance has kept BTC/USD in a narrow trading corridor since roughly the third week of June, with no significant areas of resistance overcome.
“We can see since 2017, multiple rallies followed by compressions that led to pullback, followed by another rally,” Rager continued.
While there was little reason to hope that 2020 would mark a break in the historical cycle, he suggested that when it comes, the next rally could be a watershed moment for Bitcoin:
“This time could be different but I have a strong conviction that $BTC price does at least a fake-out below the current compression before a potential rally to new (all-time high).”
Twitter hack tops bearish mood
Since July began, multiple indicators have converged to suggest that Bitcoin is due for a correction. Low volume and realized volatility have combined with concerns over stocks correlation to turn traders broadly more bearish.
For fellow trader Filbfilb, Thursday’s performance continued the trend.
“Was pretty bad losing the $9,250 level; the weekly support and bottom of the range at $8,700 is looking increasingly likely to be tested having lost the VPVR,” he told subscribers of his Telegram trading channel. He was referring to volume price visible range, an indicator that looks at historical trading over a set period to give an indication of supply or demand at a specific price rather than volume over a specific period of time.
“…Cross timeframes are all in agreement that the trend has been very much to the downside.”
A separate conversion revolved around the impact of a mass Twitter hack on Bitcoin price. Over the past 24 hours, Twitter users have been conned into sending almost 13 BTC to hackers who temporarily took over the accounts of various celebrities. All of the tweets sent under their control asked users to send Bitcoin to a specific address.
“It’s 2020 – massive Twitter hack shouldn’t be a surprise,” Rager meanwhile commented, urging followers “not to fall” for the trick.
At press time, Bitcoin was repeatedly nearing $9,000 but failing to test it significantly, reversing upwards in a tight range between $9,030 and $9,100.