As the price of Bitcoin continues to rebound from the $60,000 level, it is starting to look like the digital asset has found a bottom. While there is still some weakness in the market, cryptocurrency investors remain fairly cautious and there have been a number of recovery attempts that suggest buyers are returning to the market. If this is indeed a macro bottom, this is probably just the beginning of what could be the next bear market. However, prices still have not bottomed out and there is a possibility of lower lows to come.
There is still a lot of fear in the market
As crypto analyst Sykodelic explains in an The first of these is the US-Iran war, which could cause oil prices to skyrocket and also impact the cryptocurrency market. There is still ongoing tension over what will happen in the Strait of Hormuz.
Another factor is that the Bitcoin 200 moving average (MA) is hovering around $58,000 on the one-week chart. This means that the bears are likely to try to push the price back to this level, given that there is significant support forming.
Last but not least, the price has been hovering between $60,000 and $76,000 for several months, so the bulls have not been able to hold it above $74,400. Sykodelic believes that the current Bitcoin price looks similar to the structure that led to the crash from $98,000 last January.
Bitcoin bulls are still in the game
Despite the bearish structure rising, there are still plenty of opportunities for bulls, according to a cryptocurrency analyst. They explain that prices may have already reached a macro bottom, suggesting that the recovery from here will last longer.
Some factors that also serve as evidence for this strength are that funding ratios remain positive. This means that long-term traders are paying short-term traders to hold their current positions, which can be bullish in the short term. Additionally, Coinbase premiums have moved into negative territory and continue to do so. Sales have also dropped significantly, with the preference for buying from centralized cryptocurrency exchanges like Binance.
Given these trends, the cryptocurrency analyst believes that even if the price of Bitcoin crashes again, the worst-case scenario is that the cryptocurrency will sweep past the $60,000 lows. It could eventually fall to $56,000, but it won’t be another major crash like we’ve seen recently.
Featured image by Dall.E, chart by TradingView.com
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