Bitcoin retraced recently. Technical analysts shed some light on where it will go next. (Photo by … [+]
Bitcoin prices suffered a modest pullback over the last few days, dropping close to 10% after reaching their latest all-time high of nearly $69,000 on Wednesday, November 10.
The digital currency approached $62,000 today, declining to as little as $62,321.50, CoinDesk figures show.
Upon reaching this price point, the cryptocurrency was down 9.7% from its record price of $68,990.90, additional CoinDesk data reveals.
Since falling to that intraday low, the digital currency recovered, approaching $64,500, and it was trading below $64,000 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following these latest fluctuations, several analysts weighed in, offering their perspective on what technical traders should know.
“Bitcoin had a slight pullback (for Bitcoin standards) after hitting new all-time highs on Wednesday,” said Jake Wujastyk, chief market analyst of TrendSpider.
“This move was strongly correlated with the markets moving down on Wednesday as the broad markets were spooked about the news regarding Evergrande,” he stated.
“However, Bitcoin continues to respect the volume weighted average price from the October 27th reversal and is showing strength into the weekend.”
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“The main level of support market participants should watch is the volume-weighted average price (VWAP) from the October 27th reversal candle. This is right around $63,300,” said Wujastyk.
Jon Pearlstone, publisher of the newsletter CryptoPatterns, spoke to a similar support level, singling out the $62,500 figure.
“Bitcoin continues to show strong upside moves followed by pullbacks to retest breakout levels,” he stated.
“Today price tested the key $62,500 range and held which continues to give Bitcoin a bullish edge.”
Ben Armstrong, founder of BitBoy Crypto, also commented on the situation, speaking to a slightly lower support level.
“Bitcoin’s movement is another healthy retest of the support levels around $60k,” he said.
“Bouncing so hard off of the low 60’s is a positive sign for the bull run and bitcoin’s health.”
Kiana Danial, CEO of Invest Diva, also supplied some technical analysis, although she did so by examining different indicators.
“On the daily chart, we can see the formation of an angled double top which is a temporary bearish indication,” she indicated.
“The neckline of this pattern falls on $58K which is also the 38% Fibonacci retracement level which traces the latest uptrend that started at the end of September and seems to have paused in November,” said Danial.
“The Ichimoku cloud is acting as a strong layer of support right below $58K. This means, if these strong psychological levels can prevent further drops, then we could see the Bitcoin price continue within this choppy new uptrend.”
“A break below $58K could open doors for further drops towards the 50% Fibonacci retracement level at $54,555.”
When pointing out key resistance, Wujastyk emphasized the $65,000 level.
“The main level of resistance above market participants should watch is the volume-weighted average price (VWAP) from Wednesday’s high right around $65,000,” he stated.
Collin Plume, CEO and founder of My Digital Money, predicted that bitcoin will trade close to this level before moving to the upside.
“Bitcoin will simmer longer in the $64k-$65k before another bull run to break $70K. After that, $73K will be a major resistance,” he stated.
Armstrong also chimed in, providing slightly more optimistic figures.
“$70k resistance is the next hurdle and it’s going to be a big one. Ideally, we’ll see a parabolic move that can break $70k to pave the way towards $100k,” he said.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
