Bitcoin bounce could give way to deeper pullback, chart analysts say
Bitcoin has clawed back most of its weekly losses after an 11% rally late Thursday, but it is not out of the woods yet, according to chart analysts. The flagship cryptocurrency is testing a key level as it caps one of its most volatile weeks of the year. After dipping below $50,000 on Monday, it is now trading just above $60,000, according to Coin Metrics. Its weekly loss has narrowed to 3%. “Bitcoin got nicely oversold after slicing through $53,000 [Monday], so a little relief is in order,” Ron Ginsberg, a chart analyst at Wolfe Research, told CNBC. “I always find it important to see how an asset responds to an oversold condition, because that is the real tell.” If it can push through the current resistance, it would head for a test of $70,000 on the way to new all-time highs, Ginsberg said. However, if the bounce struggles to hold $60,000, there could be a retest of the lows from earlier in the week, he added, with a high probability it tumbles all the way down to $40,000. Bitcoin has traded in a range between $55,000 and $70,000 for most of the year, after pulling back from its all-time high above $73,000. This week, it has been wavering over $56,500. It now needs to hold that level on a consecutive weekly closing basis, Fairlead Strategies’ Will Tamplin told CNBC. “Our intermediate-term metrics for bitcoin point lower, so we would look for a bounce to give way to a deeper pullback” to near $51,500, he said. “A cyclical uptrend remains in place for bitcoin, although long-term upside momentum behind the uptrend has slowed due to its corrective phase.”
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