If Bitcoin Enters a Full-Blown Correction, the Bottom Could Come at $7,100

Bitcoin is surging higher despite weakness in the altcoin market. The coin now trades at $11,000 as of this article’s writing, in excess of 10% above the lows. BTC is outperforming altcoins, including Ethereum, which is previously underperformed. Bitcoin may not be in a full-blown bear trend anymore. Though, an analyst says that if a […]
Nick Chong
Posted by Nick Chong September 17, 2020 2 Mins Read
Bitcoin is surging higher despite weakness in the altcoin market. The coin now trades at $11,000 as of this article’s writing, in excess of 10% above the lows. BTC is outperforming altcoins, including Ethereum, which is previously underperformed. Bitcoin may not be in a full-blown bear trend anymore. Though, an analyst says that if a […]
  • Bitcoin is surging higher despite weakness in the altcoin market.
  • The coin now trades at $11,000 as of this article’s writing, in excess of 10% above the lows.
  • BTC is outperforming altcoins, including Ethereum, which is previously underperformed.
  • Bitcoin may not be in a full-blown bear trend anymore.
  • Though, an analyst says that if a bearish trend is in place, the bottom could come in at $7,100.
  • $7,100 is where there lies a confluence of pivotal technical levels.

Bitcoin Could Fall as Low as $7,100 in This Analyst’s Bearish Scenario

While Bitcoin is pressing higher, not all analysts have counted out their bearish scenarios.

One cryptocurrency trader shared the chart below on September 14th. It shows that there is a scenario in which Bitcoin falls to $7,100, 35% below the current price.

The reason why this trader’s bearish scenario has $7,100 as a target is that there is a confluence of key technical levels at that point, making it an attractive level for sellers to push towards. The following technical levels currently sit at $7,100:

  • 200-week simple moving average and exponential moving average.
  • 61.8% Fibonacci Retracement level from the move since the March 12th and 13th crash.
  • The yearly open price
  • The macro uptrend line from the $3,000 lows

Image

Chart of BTC's price action over the past few years with analysis by crypto trader Coiner-Yadox (@Yodaskk on Twitter). Chart from TradingView.com

Unlikely to Play Out

The bearish scenario is unlikely to play out, though.

One crypto trader shared the chart below, which shows that Bitcoin has recently bounced cleanly off a pivotal technical level. The level BTC bounced off of held multiple times during previous bull markets and held as resistance during previous bear markets.

Bitcoin managing to hold the level suggests that the expectations of a further uptrend are likely:

“Willy Woo’s 128 day MA has done a decent job at signaling support/resistance and is currently offering support.”

Image

Chart of BTC's price action over the past few years and past few weeks with moving average analysis by crypto trader "Nunya Bizniz" (@pladizow on twitter).
Chart from TradingVIew.com

Adding to the Bitcoin bull case, the Federal Reserve released a Federal Open Market Committee announcement on Wednesday.

The announcement asserted that the central bank will keep interest rates low:

“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.”

These low interest rates could be a boon for Bitcoin, which should outperform during inflationary times.

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
If Bitcoin Enters a Full-Blown Correction, the Bottom Could Come at $7,100
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