The price of Bitcoin [BTC] has begun to see a sharp decline in the past few days after its rally to $8000 and beyond. With the coin currently trading at $7382, it is experiencing a loss of 3.9% and 6.9% over the past 24 hours and 7 days respectively.
Robert Sluymer, the Head of Technical Strategy at Fundstrat, recently appeared on CNBC’s Futures Now program to speak about the technical case for Bitcoin’s price. The coin seems to be heading on a downward trend towards what Fundstrat generally holds as a bottom to the price of Bitcoin, at around the $6000 mark.
Sluymer did mention that it was a very difficult thing to be trading, stating the coin was at a passage of “a moment of truth”. He said:
“It’s a very difficult thing to be trading. Our view is that we’re at a moment of truth here, the daily chart is very volatile. This takes us back to the 4th quarter of last year, and the tremendous moves here. But the short term trends on the huge trading range that we’ve been in really do matter, [especially] these multi week moves.”
He went on to mention that he utilizes the 50 Day Moving Average [DMA] as an indicator for technical analysis. Through this analysis, Fundstrat observed a bottom at around the $6000 level, as seen during the period of correction from May to June. This is then followed by the 50 DMA moving upwards.
The prediction made by Fundstrat was that there was a pullback setting up after the move from $6000 to $8500. He went on to say:
“Right here right now, I think Bitcoin is at a very critical stage. If that uptrend is going to continue it has to dig in right now. It’s right at that 74%-75% support level, we saw in the end of June and mid-July.”
Sluymer made it clear that if the price movement of Bitcoin cannot dig in currently, the trend defined by the 50 DMA will begin to roll over. This leaves the coin vulnerable to a collapse back into the $6000 margin, stated the analyst.
He also offered advice to traders, stating:
“Down at these levels, trade long with a tight stop $7400 or $7455, I think we’re going to get a bounce.”
There will be a fight through the $7800 mark, believes Sluymer. This would provide solace to a market that is bleeding red, with over $30 billion lost in the overall market capitalization of the cryptocurrency market.
Even as a lot of speculation rules the day in the space, Sluymer reiterated that Bitcoin was a “very technical asset class”. He even went so far as to say that there were almost purely technical traders involved in cryptocurrencies.
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