In the past few hours, the price of Bitcoin (BTC) has crashed, falling from the daily high of around $8,910 to a local low of $8,585, the lowest the cryptocurrency has traded at in around 18 hours. This represents a 3% drop in a matter of a few hours, which honestly isn’t that surprising considering the volatility the cryptocurrency markets have seen over the past few days.
While this drop wasn’t that deep when it comes to crashes in the cryptocurrency market — Bitcoin Satoshi Vision is down 35% from the local peak of its price — this drop put BTC under a bullish ascending triangle pattern that was forming on the one-hour chart.
This begs the question — is the rally done? Will BTC now retrace much lower than it already has?
Bitcoin Plunges 3%: What’s Next?
On the bear side of things, trader Big Cheds posted the below analysis, showing that with this latest move, Bitcoin has started to form what is known as an “M top,” which has price action shaped like an M.
Right now, the pattern is in its middle stages, not yet forming the entire latter half of the “M” in the topping pattern. But should it play out in full, BTC could fall as low as $8,200, the analyst’s chart suggests.
Other than that, analysts seem to be taking this plunge with optimism. Earlier today, Filb Filb, a pseudonymous though still prominent Bitcoin trader that called Bitcoin’s sudden surge to $10,000 and subsequent decline to the $6,000s before these two moves happened, posted the below charts on TradingView.
In it, he shows that per his proprietary indicator, the two-hour, four-hour, six-hour, 12-hour, one-day, and three-day charts of Bitcoin are all printing signs that investors should be long, implying that more upside is imminent.
It is likely that the short-term charts may have flipped neutral or bearish temporarily, but the medium-term charts remain bullish, implying that prices are likely to return higher later.
Also, Bitcoin, even at $8,600, remains above a series of key moving averages.
Adaptive Capital’s Murad Mahmudov, formerly of Goldman Sachs, recently wrote on Twitter that “bears are deluded at best, dishonest at worst,” drawing attention to the below chart which shows that BTC has crossed above a number of key moving averages. These are including but not limited to the 128-day simple moving average (SMA), 200-day exponential moving average (EMA), 50-week SMA, and 100-week SMA.
So right now, it seems that bulls remain in control on a medium-term basis.