After a strong uptrend that brought Bitcoin from $6,800 to $8,450 in a matter of a few days, the cryptocurrency market has started to take a massive breather. Since peaking at the key $8,400 resistance just the other day, the price of BTC has plunged by 8%, tumbling to $7,800 as of the time of writing this article.
Related Reading: Bye-Bye Bear Market? These Hallmark Bitcoin Reversal Signs Appeared
While some say it is too earlier to tell that this is a full-fledged reversal, analysts are wary that this pullback is a precursor to a drop into the $6,000 range, which would likely perpetuate the bear market Bitcoin has found itself in over the past six-odd months.
Bitcoin Poised to Fall Towards $6,000s, Analysts Assert
CryptoHamster noted that the price action seen after Bitcoin tapped $8,400 has been rather negative.
Firstly, the local volume peak marked the top, seemingly implying that it was a so-called blow-off top, which is a chart formation most often followed by deep retracements. Secondly, the TD Sequential is about to print a sell nine candle, implying a strong bearish reversal in the coming days that will only amplify what has already been seen. And lastly, the ADX and Fisher Transform — two directional technical indicators — suggest that bears are taking control after the short rally by bulls.

That drop below 23.6% Fibo looks bad.Also:– widening formation (uncertainty)– the volume peak was at the top– TD sequential green “8” (if next is “9” – a sign of a drop)– ADX is below 25 (the rising trend is weak)– a Fisher Transform bearish crossover$BTC $BTCUSD #bitcoin pic.twitter.com/lrIdCCvWgv
— CryptoHamster (@CryptoHamsterIO) January 10, 2020

As to where BTC could end up in this retracement, analysts have looked to the $6,000s, unfortunately enough.
Cryptocurrency trader HornHairs noted that if BTC manages to close the weekly candle on Sunday under $7,870, he will expect a strong move down to the $6,000 flat (a region of key, key macro support), noting that the recent price action is rather indicative of a clear bull trap.

$BTC
We got the breakout, which was a good start, but as the weekly chart stands, it looks like a bull trap.
If we close below $7870 on Sunday, my expectations will be a move down to $6k. Very important next few days. Nothing conclusive until Sunday. pic.twitter.com/9V4Gia3b4n
— HornHairs (@CryptoHornHairs) January 9, 2020

Do Bulls Have Any Hope?
With this confluence of bearish analyses, the question remains — do bulls have any hope?
According to Financial Survivalism, a pseudonymous analyst that last week called Bitcoin’s surge into the $8,000s when the asset was trading in the high-$6,000s, for sure.

Check out this post on @tradingview to learn why I think $BTC will retest all time highs by July 1, 2020. https://t.co/IK87UVVpmf
— Financial Survivalism (@Sawcruhteez) January 9, 2020

In a recent TradingView post, the analyst asserted that he still expects for BTC to hit $20,000 by July 1st of this year, despite the drop that has been seen. He specifically looked to the following technical readings:

The Lucid Stop and Reversal has printed a bullish candle for the first time since July 2019, when BTC was trading well above $10,000.
The Average Directional Index on a daily basis has seen the first bullish crossover since March 2019.
The one-week Relative Strength Index for Bitcoin is “getting ready to test 50,” a level that if broken through may imply dramatic upside.
The one-day Ichimoku Cloud has formed a bullish TK cross.

Also, the fundamentals for Bitcoin and the broader cryptocurrency space remain decisively positive. Just the other day, January 6th, the hash rate of the Bitcoin network — a measure of the computational power being allocated to processing BTC transactions — hit a fresh all-time high above 120 exahashes per second, signaling that miners are continuing to allocate vast amounts of capital towards this space.
Featured Image from Shutterstock The post appeared first on NewsBTC.