Since its third major surge of the now two month old Bitcoin rally, the king of crypto has held on to all of its gains. Support and resistance zones have shifted to new higher levels and the chart, when zoomed out, looks unnaturally parabolic, remnant of the December 2017 one.
Bitcoin Bull Flag
A descending channel has started to form for BTC over the past 24 hours. From a high of around $8,800 it has fallen steadily down to $8,550. Daily volume has trailed from $27 billion to $23 billion as the king of crypto cools off.
The bull flag pattern has been labeled as the almost vertical pump in Bitcoin price resembles the pole and the subsequent consolidation is the flag. Crypto trader ‘CryptoFibonacci’ has been looking at the two hour chart;
“Nice bull flag and also still holding above the old resistance/new support line too.”
$BTC 2 hour Chart.
— CryptoFibonacci (@CryptoFib) May 28, 2019
The old resistance, new support zone is where Bitcoin peaked during its first foray above $8k. This is around the $8,300 area though stronger support lies at $8,000 where BTC traded for the best part of a week.
On the high side analysts are still eyeing the $9,600 level as there is little resistance between current prices and there. Crypto analyst ‘DonAlt’ envisions things going even higher and in a recent tweet said;
“One after the other resistances fall. Two remain 10.000 and 11.500. Once those are cleared, clear skies await. I’ll be looking for leveraged buys in the 8200-8400 area this week. Bulls clearly in control, not trying to fight the trend,”
What About The 30% Pullback?
It is a fact that Bitcoin has corrected by 30 percent several times following large rallies over the past few market cycles. Crypto trader Josh Rager has been looking at historical charts and has observed that Bitcoin has had eight pullbacks of 30 percent or over in the last bull run;
“$BTC: Still waiting on that 30%+ pullback?
Bitcoin had eight 30%+ pullbacks last market uptrend but the average time between each pullback was 98 days. BTC had a serious 26.3% pullback on May 17th, which means the next major retrace could be a couple months away.”
1/ $BTC: Still waiting on that 30%+ pullback?
Bitcoin had eight 30%+ pullbacks last market uptrend but the average time between each pullback was 98 days
BTC had a serious 26.3% pullback on May 17th, which means the next major retrace could be a couple months away pic.twitter.com/SwsNMYWNKb
— Josh Rager (@Josh_Rager) May 28, 2019
With that in mind the next big correction may not come until July or August. At current price levels a 30 percent pullback will drop Bitcoin back to just over $6,000 but it could have reached higher resistance by then. If it gets to the next resistance level, which many are expecting, the correction would drop back to $6,700. Rager added; “Everyone eyeing mid $9ks for pullback. Which says a retrace could come sooner. Be ready for any scenario.”
The correction will come but whether it is this week or in another couple of months remains to be seen. What is likely though is that massive buying at lower levels will keep the momentum going for this uptrend which could be even bigger than the last.
Image from Shutterstock
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