Bitcoin faces a crucial decision as an ongoing correction changes the nature of the $30,000 breakout. On April 20, BTC/USD fell below $29,000 as bulls faced a battle for ground reclaimed in March. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD heading to $28,800 on Bitstamp. Earlier wicks below $28,600 were quickly bought up, but Bitcoin still threatened to flip $29,000 to resistance on the day, as traders eyed a crucial support zone.
Analysts are divided on the future of Bitcoin. Some remain optimistic, with analyst Matthew Hyland noting one-month lows in Bitcoin’s relative strength index (RSI) on daily timeframes. RSI gives an insight into how overbought or oversold BTC/USD is at a given price level, and while still relatively high, such a reset and subsequent reversion can signal an inbound uptrend. Elsewhere, popular trader and analyst Jelle continued to observe a copycat formation by BTC/USD, which neatly followed a price fractal from 2020. This ultimately produced a so-called “Bart Simpson” pattern — a spike higher, followed by a plateau and subsequent retracement — only to then break out even higher later on.
However, John Bollinger, creator of the Bollinger bands volatility indicator, called for caution. Bitcoin, he noted on the day, had reversed away from its upper Bollinger band, abandoning a breakout beyond it. “Bitcoin just pulled back to its middle Bollinger Band and its prior breakout level. We call this a logical place. Time to Pay Attention!” he tweeted. With volatility returning to BTC/USD in recent days, Bollinger’s warning should be noted.
“Whilst the Bitcoin market is correcting, we still have the average transactor taking profits,” Checkmate, lead on-chain analyst at Glassnode, wrote in part of a Twitter analysis. “To me, this indicates that chips are still being taken off the table, and we don’t yet have a flush out of top buyers in full (like March).” Checkmate added that he was waiting for realized losses to take control as a signal of “panic” by those who bought BTC as it crossed $30,000 this month. An accompanying chart showed the Adjusted Spent Output Profit Ratio (aSOPR) metric, which captures aggregate profit and loss of on-chain transactions.
The ongoing correction in the Bitcoin market has caused a stir in the cryptocurrency community. Bitcoin’s latest “Bart Simpson” pattern is causing concern among traders, and analysts are divided on the future of the cryptocurrency. While some remain optimistic, others like John Bollinger have called for caution. With the average transactor taking profits, the market is still in a state of flux, and traders are keeping a watchful eye on the support zone. As Bitcoin continues to face challenges, only time will tell what the future holds for the world’s most popular cryptocurrency.
