Bitcoin hit $9,000 then got cold feet. How far will it pull back?
If the last couple of months are a good precedent, the pullback has already gone as far as it's going to.
Bitcoin cut through $9,000 like a hot knife through butter, in that it went through easily but made a big mess in the process. And then things got interesting – or continued to be interesting, rather.
Now that the ascent which began in April has gone through a few twists and turns, it's possible to see some patterns emerging.
In context, we can see that the spike to $9,000 wasn't especially unusual, and neither was the subsequent decline. Firstly, it's fun but not particularly jaw-dropping in the wider context of the ongoing rise. Secondly, it retraced to about where you'd expect. That's the third time in this run that you can see Bitcoin prices finding support levels at the prices of previous spikes.
At the start of April Bitcoin swiftly leapt to the $5,200 to $5,400 range, which would serve as a confident layer of support over the next month. The same happened more briefly in the $5,600 ballpark. And now Bitcoin's fall from $9,000 has been arrested by support around $8,200, which is precisely where you'd expect it to be.
The previous resistance levels seem to be neatly turning into support, as they are sometimes known to.
How far will Bitcoin retrace from this rise? Assuming it continues the trend of the last couple of months, no further than it's already gone.
The markets are also most definitely hotter now, and the month of May delivered a solid parade of unbroken volatility (green blob) for the first time in a long time since last November. The drop from $9,000 hasn't done much to alter the bigger picture, and the general consensus among soothsayers is that it's bullish until the 50-day moving average (yellow line) drops below the 200-day (red line).
Other fortune tellers were more ambivalent, but on the whole, it seems that this rise has exceeded monthly prophet forecasts.
Disclosure: The author holds BTC, BNB, ATOM, IOTA at the time of writing.