The Bitcoin price (BTC) has recovered strongly from $5,200 to $7,200 from the previous two weeks, despite the declining desire for high-risk resources such as single-stocks and cryptocurrencies.
One dominant trader predicted the entire price movement of Bitcoin because its first fall from $10,500 to sub-$6,000, and in the medium-term, the digital asset’s trend remains gloomy.
Crypto market daily price chart. Source: Coin360
The reason to get a short term rally to $8,500
PentarhUdi, a recognized technical analyst and trader who has deftly predicted multiple Bitcoin market cycles before, initially estimated that Bitcoin price would dive from $10,500 to $5,800 from the first week of February.
On February 10, 2020, the trader clarified that based on candlestick wicks, $10,500 was a lower low in a macro level and given that this amount was a historically heavy resistance, a drop to $5,800 was highly probable.
Citing PentarUdi’s $10,500 to $5,800 prediction, crypto whale and Bitfinex trader Joe007 said:
“There is one, and only one, TA analyst in the world that I really admire, and just today, a few hours before, he created this piece of analysis.”
Due to significant selloff in the U.S. stock market and the worsening Coronavirus pandemic which has since drifted across the U.S. and Europe, the purchase price of Bitcoin over prolonged its downtrend and fell to $3,600 on crypto futures exchanges.
The fact that buyers instantly stepped in to buy the dip and pushed the price from $3,600 to $5,200 led PentarUdi to signify Bitcoin price is extremely likely to rally to $8,500 inside the brief term.
“This should bounce up from weekly sma 200 ($5,200) up to daily sma 200 ($8,500). Split of the top trend line invalidates this bearish count. I remind this is a hypothetical bearish outcome of previously published notions.”
As a note of caution, PentarhUdi cautioned that as a result of the current global financial panic, Bitcoin is still likely to fall below $3,000 after rebounding past $8,000.
According to the trader:
“I got a bearish target between $1,800 and $2,500. In this scenario weekly 200 SMA will be broken and become resistance. Many times and devotes will need so as to divide it up and make it support”
BTC-USDT daily chart. Source: TradingView
In short, Bitcoin price is currently seeing a relief rally to the 200-day SMA, a point which has acted as a potent resistance area throughout the past several decades. Still, there’s a strong probability that the complete rally becomes vulnerable to a deep correction.
The following upside move may be a fake-out
With uncertainty in the global equities market and dire warnings from governments the book Coronavirus pandemic could possibly result in increased deaths during the next few months, a recovery to $8,500 could nevertheless be a bull trap.
On March 29, Anthony Fauci, the director of the U.S. National Institute of Allergy and Infectious Diseases said the Coronavirus could potentially lead to 200,000 fatalities.
If efforts to contain the outbreak in the U.S. and Europe fail and the development of a vaccine takes 12 into 18 months, the belief in crypto and equities markets could have a lot deeper bearish turn.