Bitcoin’s consolidation seen throughout the past few days may simply be the calm before the storm, as one technical indicator is now suggesting that the benchmark cryptocurrency may soon see a movement of a similar magnitude to that seen when BTC plummeted from $8,000 to $3,800.
Although it still remains unclear as to whether or not this movement will favor the cryptocurrency’s bulls or bears, one top trader is noting that he believes it is a strong possibility that the crypto revisits the $4,000 region before climbing higher.
This Indicator Shows Bitcoin’s Range Bound Trading Won’t Last Long
Over the past several days, Bitcoin has been trading sideways around $6,600, with each attempt but buyer to surmount the $6,800 region being firmly rejected by sellers.
This has led to the formation of a relatively small trading range between $6,600 and $6,800, with BTC firmly respecting these two levels over the past several days.
It is important to keep in mind that consolidation beneath resistance can be a bull-favoring sign, although the multiple rejections have been faced at the upper boundary of this trading range seems to be an overtly bearish sign.
Big Cheds, a popular crypto analyst on Twitter, explained in a recent tweet that Bitcoin’s Bollinger Bands are currently the tightest they have been since right before the crypto saw its capitulatory selloff from $8,000 to $3,800.
“Bitcoin 4 hour – BB’s haven’t been this tight since before the drop from 8k,” he noted while referencing the chart seen below.
$BTC #Bitcoin 4 hour – BB’s havent been this tight since before the drop from 8k https://t.co/gLUzCKS1Ur pic.twitter.com/UCniiwSXIh
— Big Cheds (@BigCheds) March 27, 2020
Assuming that history rhymes, it is likely that the crypto will soon make another massive movement.
This Top Trader Believes BTC May Make a Bid at $4,000
SalsaTekila – a highly respected pseudonymous trader on Twitter – explained in a recent tweet to his over 35k followers that he is tethering 45% of his Bitcoin positions due to there being a real possibility that the crypto declines into the $4,000 region in the near-term.
“Still 45% tethered, still think it’s possible we see 4000$ levels again,” he noted.
Still 45% tethered, still think it’s possible we see 4000$ levels again. pic.twitter.com/3Brc7XQCus
— SalsaTekila (JUL) (@SalsaTekila) March 27, 2020
He isn’t alone in this belief either, as multiple other traders – including highly-respected analyst TraderXO – have also noted that Bitcoin may soon decline towards $4,000 or even lower.
The days and weeks ahead should elucidate how Bitcoin’s current bout of sideways trading will resolve, and it does appear to be likely that its next movement will be significant.
Featured image from Shutterstock.