Bitcoin enthusiasts have been overwhelmed by the recent surge of BTC past $9,600. However, shortly after its surge, BTC fell back to just above $9,400.
Although several investors might begin to believe that this is Bitcoin’s moment to shine, technical analysts reveal that BTC is still in a Bear market.
Why are analysts advising caution to BTC investors?
BTC is known to be volatile. The recent rally was spectacular in its way. The rally came despite the Dow’s brilliant rise of more than 1100 points. The timing was even more catchy, as it happened few hours after Goldman Sachs removed BTC from the classification of an asset.
However, if we look at the BTCUSD price on a weekly level, it has not increased. BTC is, in fact, at the same rate, as it was just a week back. So there has been no net gain.
Moreover, the long term technicals suggest an impending correction for BTC.
Technical patterns that could be a barrier to BTC price action
If we look at the four-hour timeframe for BTC, we can observe a Pivot. It can be traced back to April 13. BTC respected this pivot on several occasions.
Now that BTC is trading around $9,440, this pivot will act as a Bearish Fractal, correcting BTC downwards. On top of the Bearish Fractal, BTC faces a stiff resistance level at $9,621.63. BTC fell from after reaching $9,600 earlier in the day as well.
Even after both these indicators, another factor that plays a significant role is the capitulation with the Bitcoin Hash Ribbons. It alone could bring BTC down significantly.
Noted analysts, Charles Edwards, said it takes approximately three weeks before recovery from the capitulation begins. And since the capitulation happened on May 25, it is still a long way to start recovering! Till then, BTC remains in a technical Bear market.