Traders Forecast Bitcoin Will See a “Cool-down Period” as Rally Overheats
- Bitcoin has been caught within the throes of a consolidation phase ever since its price exploded up to its recent highs of $18,600
- The selling pressure that existed here was significant and sparked a $1,000+ move lower that was eventually absorbed by bulls
- This price action has done little to provide insight into its near-term outlook, as both bulls and bears have shown signs of strength
- Whether or not it can break and hold above $18,000 should provide serious insights into its near-term outlook
- One trader is expecting a “cool-down” phase in which BTC inches lower or sees a consolidation phase
- He notes that this type of short-term trend would be “more than welcome” considering the strength of the recent rally
Bitcoin is showing signs of losing its momentum following its massive rally from its recent $10,000 lows.
The crypto is trading up nearly 80% from where it was just a few weeks ago, and whether or not it can push higher in the near-term should depend largely on the resistance at $18,000.
Earlier this week, BTC faced a grim rejection at $18,600 that slowed its ascent and caused it to plunge lower.
The consolidation phase seen in the time since may mark a “cool-down” phase, which means that some slight downside could be imminent in the near-term.
Bitcoin Struggles to Hold Above $18,000
At the time of writing, Bitcoin is trading just a hair below $18,000 at its current price of $17,950. This marks a notable upswing from its multi-day lows of $17,400 but a decline from highs of $18,600.
Because it is trading squarely between these two levels, where it trends in the near-term may depend largely on whether or not bulls can flip the $18,000 equilibrium level into support.
An ability to do so could be the impetus for another leg higher.
Trader Claims BTC May Enter a “Cool-down” Period
“BTC: Expansive moves up often see a cooling off period, Profit taking etc. A corrective leg is more than welcome. Paying myself!”
Image Courtesy of TraderXO. Source: BTCUSD on TradingView.
Where BTC trends throughout the coming few days should depend largely on its continued reaction to $18,000. Any firm break above this level, or rejection below it, could even set the tone for the rest of 2020.
Featured image from Unsplash. Charts from TradingView.