Monday saw as much as a 4.5% dip before price came back. Tuesday has so far been worse. Will bitcoin bounce from the current level, or is the market to be given a more generous opportunity to buy bitcoin?
More downside to come?
The crypto market is in the red for the second day running. Monday registered a 2.3% pullback, and so far on Tuesday, the price is down a further 4.4%. Could this be the entire extent of this pullback, or is the market in for more downside?
CME gap still to be filled
Source: Coingecko/Trading View
On the daily chart it can be seen that the most recent dip for $BTC has only taken the price down to the main trend line that has been respected since early February. A bounce could happen here, but this still remains to be seen.
One scenario that still may be about to play out, is that there is a CME gap to be filled down at $64,100, which also happens to be a level of good support. It could be that the price wicks down through the trend line to this level in order to close the gap.
Bull markets are when prices go up
For traders and investors who may be getting cold feet, it must be borne in mind that bitcoin is in a bull market. Bull markets are when prices go up, and although there will certainly be corrections along the way, it just remains to stand firm and weather these storms.
Looking back over this current bull market, it should be noted that all corrections so far have not exceeded much more than 22%, and the current one (from the all-time high of $73,800) is around 17.5%. The price would need to fall to below $61,000 in order to make a lower low, and only then would the up-trend be broken.
Leverage traders are wiped out
A positive factor to add to the mix is that due to the price pullbacks, both funding rates and open interest have been completely reset. Those trading on leverage, and adding to the frothiness of the market, have been liquidated, losing around $422 million. This means that the market is now reset, and the bounce-back could happen soon.
At time of going to press, the $BTC price looks as though it may be about to lose the trend line, which means it could be heading down to close that CME gap. An excellent entry or dip-buying opportunity could be about to present itself.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
