Bitcoin price has rebounded 9% from Tuesday’s low, but it’s barely moving up, which doesn’t inspire confidence. Meltdowns like we’ve seen this week often expand downward, forcing the price to oversold in the short term, causing a reversal. When the price starts to rise, buyers who fear missing the discount window chase the price higher. Additionally, those who exited at the lows are desperately rushing back in hopes of making up for some losses and benefiting from the uptrend. This strategy can sometimes lead to a second and more violent wave of liquidations.
As we’ve seen several times this year Bitcoin (BTC / USD) had an exaggerated move that was traced back before the move was extended. For example, BTC fell from a high of $ 64,900 to $ 51,3,000 in April before rebounding to $ 57,600. However, within a week, the price dropped to $ 47,000.
Additionally, Bitcoin price lost 20% between May 12th and 13th before rebounding by 15%. By May 19, BTC was 44% lower. This is likely due to the fact that crypto traders are conditioned to buy the dip. And that was a good strategy over a long enough period. However, for those who are late for the party, it’s a dangerous game.
BTC / USD price analysis
If Bitcoin price drops from here and crosses Tuesday’s low of $ 42,830, it guarantees that anyone who has bought that dip will be under water on their purchase. If so, a stop-loss sale could trigger a cascade that brings the price below the 200-day moving average of $ 41,346. And when that happens, Bitcoin will be in a bear market again.
However, the price is stuck at the moment. If BTC finishes the day above Tuesday’s closing price of $ 46,894, it can stretch up over the weekend. However, the bulls will not be able to claim victory until BTC has bounced back from $ 50,000. If so, Bitcoin price could continue its attack at $ 58,000 trend resistance.