Analysts expect an impulsive Bitcoin bounce despite market-wide fear
- Fear and Greed index indicates fear, but analysts expect Bitcoin to rally in the next major move.
- Bitcoin address activity has declined following a pullback in the asset as traders wait for a bullish reversal.
- Analyst expects an impulsive bounce to follow the recent consolidation in the top cryptocurrency.
The correction in the Bitcoin market highlights the need to book profits consistently along the rally. Despite the market-wide recovery, Bitcoin price is stagnating under resistance.
Bitcoin price set to recover after recent slump
The 16% drop in Bitcoin price within a single day showed traders the importance of locking in profits whenever accumulation hits a peak. Flash crashes in BTC are fairly common, and the recent rapid shakeout does not imply that Bitcoin is off track from the end-of-year prediction of $100,000.
The violent move resulted from the $4 billion cascading liquidations from the over-leveraged Bitcoin and Ethereum futures.
The Bitcoin fear and greed index, considered an indicator of the overall sentiment of traders in the market, currently indicates “fear.” Adrian Nazari, the Founder and CEO of “The Birb Nest,” states,
Crowds are always right in the middle of a trend but always wrong at the extremes.
This implies that buying – or accumulating – may be ideal, despite “fear” among market participants. According to Nazari, the volume-based resistance is $47,500, and the upper resistance is $50,402. The asset is trading at $47,121 at the time of writing, and Nazari expects the cryptocurrency to continue its upward climb.
Bitcoin on-chain metrics have remained essentially unchanged and bullish since July, but the trend would likely change with a drop in the number of transactions and reduced address activity.
Will Clemente, lead insights analyst at Blockware Team, commented on the macro bullish on-chain predictions. Clemente stresses that on-chain outlook is not to be used for day-trading, and liquidation cascades do not invalidate macro trends.
Getting pretty fed up with the whole "on-chain is only bullish" misconception tbh. Anyone who says this doesn't understand how the analysis should be used.
— Will Clemente (@WClementeIII) September 9, 2021
- On-chain tracks macro trends, its use case is not to predict liquidation cascades. Look at derivatives data for that.
Cryptocurrency analyst behind the Twitter handle @Crypto_Ed_NL started bullish on Bitcoin. He changed his stance a few hours ago. The trader expected an impulsive bounce that has not materialized.
It was fun as long as it lasted but BTC is breaking down from that pennant.
— Crypto_Ed_NL (@Crypto_Ed_NL) September 9, 2021
Seems I was wrong with my expectation.
So be it, no big drama.
Don't bother to read the replies....
The "told you so guys" will come in full force https://t.co/f8NHhhgW7q
FXStreet analysts evaluate in the following clip where the cryptocurrency is headed next, predicting that the next bullish target is $57,000.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
