Bitcoin (BTC) has been firmly controlled by the bulls in the last two weeks, with the cryptocurrency gaining a massive boost after falling to a low of $ 6,800 earlier this month.
Since recovering from these lows, Bitcoin has been caught in a firm upward trend that has allowed it to move towards the $ 9,000 region, which each setback is relatively minor and quickly followed by an extension of its momentum.
Analysts now point out that it may still be too early to be too captivated by the recent Bitcoin rally, as there are multiple factors that suggest bulls have exceeded too much and that bears will soon take control of cryptography.
Bitcoin meets towards $ 9,000 while bulls catalyze a massive rally
At the time of writing this article, Bitcoin is trading a little less than 8% at its current price of $ 8,700, which marks a notable rise from its daily lows of less than $ 8,100, and an even greater rise from its weekly lows of $ 7,700 that was established at the end of last week.
After BTC exceeded $ 8,000 last week, several analysts noted that it was imperative that it remain above $ 7,700, as this was a key level of technical support with historical significance.
Because buyers were able to defend this level and maintain BTC above $ 8,000, it seems that their recent extended side trade bout around $ 8,100 marked a bullish consolidation phase.
Despite the obvious optimism of Bitcoin today, Alex Krüger, a leading economist who focuses primarily on cryptocurrencies, explained in a tweet from his alternative account that he believes the market’s focus on long positions may indicate that bulls are overextended at this time.
“The $ BTC table is very strong, the funds are too extended, many alts fly. I am flat (covered) from the average of the upper 8500. A little premature Having short orders before 8800 with stops before 9000. A tactical short. The market changed and the focus is mainly on the long ones, “he explained.
$ BTC The graph is very solid, the funds are extended too much, many alts fly. I am flat (covered) from the average of the upper 8500. A little premature Having short orders before 8800 with stops before 9000. A tactical short. The market changed and the focus is mainly on the long ones.
– Alex (@classicmacro) January 14, 2020
Key resistance can stop the current BTC Rally
It seems that the Bitcoin night rally already shows signs of hesitation, as cryptography has receded slightly after taking advantage of a strong resistance of around $ 8,800, a level that popular analyst Big Chonis believes can lead to a reversal of the trend bass player.
“$ BTC: the upper portion of the cloud is being tested on the daily #bitcoin chart … keep in mind that this is where the rejection occurred last time,” he said while pointing to the following chart.
– Big Chonis Trading 🚀 (@BigChonis) January 14, 2020
If this resistance continues to remain strong for the next hours and days, it may mean that additional losses are significantly imminent.
Featured image from Shutterstock.