Bitcoin Is Facing A Pull-Back And Consolidation, According To Bitcoin Analyst
Overall, the crypto markets have tallied significant gains over the past several weeks. The winds may be changing slightly in the mid-term, however, according to crypto influencer and technical analyst Brian Krogsgard, a.k.a. Ledger Status on Twitter.
General sentiment in the crypto space appears to include both further possible upside for Bitcoin, as well as potential upcoming sideways or downward action. Krogsgard noted crypto’s largest asset may be a bit far extended, according to an interview with Crypto Potato on June 3.
“I’m in the camp of looking for pullbacks in terms of being a confident buyer moving forward,” Krogsgard said. “We’ve pretty far extended our way up, and even something like the daily Bollinger Band midline is around $8,200,” he added. “The 50-day moving average [MA] is around $6,700, so there’s quite a mean reversion play available.”
When Bitcoin surged above the $9,000 mark, the asset was met with a sizeable amount sell pressure, Krogsgard noted. “For a variety of reasons, I am looking for some degree of pullback, but I’m mostly looking to be able to buy the right dip rather than try to short this whole thing down.”
The influencer and podcast host noted he is not sure when such a pullback will occur, although he does think a retracement will occur in some capacity. “I don’t think it’ll be necessarily a 50% pullback,” he said. “Historically, 30-40% pullbacks, even in a bull market when the bull market is going really fast, [are] pretty normal.”
As far as a move back up to $9,000 and beyond for Bitcoin, prior to a more extended retracement or consolidation, Krogsgard pointed toward $9,600 and $10,000 as seemingly formidable resistance levels, mentioning that $9,600 was the April 2018 top and $10,000 could prove to be a psychological resistance.
“Maybe we’ll get up there around $9,600. I’d be shocked if we spend any time towards $10,000. Even $9,600 feels less likely to me, just because I think there’s a lot of people willing to sell between $9,000 and $9,600.”
If Bitcoin rises further up from here, Krogsgard expects the move to be a “divergent leg” of sorts, showing decreasing market momentum while price continues higher. In this scenario, he mentioned he would also look for decreased volume and lower highs on indicators such as the relative strength index (RSI).
The influencer noted a divergence on the daily candle chart already has occurred. He said he also has his eyes peeled for divergences on the weekly time frame chart to occur. “There’s a bear div [divergence] on the 3-day already, so, we could see, over the course of a month, some sideways mild down action, and maybe make a slight higher high, but I would expect that to be the type of divergence we’re looking for,” he said.
“We really just haven’t had enough consolidation on high timeframes. If you look at the weekly chart, it’s just week after week after week of extremely bullish momentum and at some point that stuff has to wane.
Regarding Bitcoin’s consolidation, Ledger Status said he sees the $7,200 zone as the “lower bound” of what might be referred to as a normal consolidation range. “Even if we get a $1,000 move, to me that could still be just normal consolidation in this range and we could still make a weekly bear div having dropped to $7,200,” he said.
At press time, Bitcoin holds a price in the $8,500 range, according to CoinMarketCap.
*This article contains opinions and speculations from the author, those interviewed and others.
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