Disregarding the ongoing consolidation, Bitcoin has seen an explosive price performance in the past two weeks. In that time frame, the leading cryptocurrency has gained approximately 25.8%.
While this latest move higher brought the cryptocurrency above critical resistance levels in the $10,500 range. $10,500 acted as a point at which three separate Bitcoin rallies topped, making it a level of importance.
Despite this technical strength the cryptocurrency has exuded, one analyst isn’t counting out the scenario where the asset plunges to $8,000 before a bigger bull run.
Related Reading: Crypto Tidbits: Bitcoin Explodes Past $11k, Ethereum 2.0 Nears, Cardano’s Shelley Launches
Bitcoin Still Could Drop to the $8,000s: Analyst
Bitcoin could drop towards the $8,100 region as the cryptocurrency bull trend loses momentum, says a cryptocurrency trader. He noted that he thinks the “risk reward [is] wildly favoring bears” at the moment due to the shape of the recent price action:
“$BTC macro picture: I think we’re topped or maybe one last impulse above current high. Had my eyes on 13k$ resistance for a while, went close enough, R:R wildly favoring bears from here until 13k is closed through and held above. Macro pull-back into $8’125 area is plausible.”
Chart of BTC's price action since the start of the year with analyst by crypto trader SalsaTekila (@SalsaTekila on Twitter). Chart from TradingView.com
He elaborated in a later tweet that since Bitcoin crossed above the “massive $10,500 liquidity pool,” taking longs has made little sense from a risk management perspective.
He isn’t the only traders to have made such an analysis.
Another trader shared last week that Bitcoin’s rejection at the $12,000 range highs last weekend suggests that a drop towards the $9,000s and potentially lower is possible:
“$BTC – HTF View: Range highs tagged and closed back inside. CME Gap at 96s – $500 below. Plenty of stops resting at the mid range – wont be surprised if price pulls back deep.. Bullish scenario is a reclaim of the range high. Im watching 2 levels – July and August monthly levels.”
Related Reading: How U.S. Restrictions on Wechat & Other Chinese Brands Could Boost Crypto
All Eyes on Gold
For now, it seems that Bitcoin’s price action is dictated by the precious metals market. This means that for BTC to continue its trend higher, gold and silver should continue to breakout while the U.S. dollar weakens.
It isn’t clear how likely a further rally in gold is, though, as the U.S. dollar bounces from extremely oversold levels.
Related Reading: Crypto Tidbits: Goldman Stablecoin, Dave Portnoy Wants Bitcoin, DeFi Boom
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com An Analyst Isn't Counting Out the Scenario Where Bitcoin Drops to $8,000
