Bitcoin has seen strong rejection in the past few weeks. After peaking at $ 12,500 in August, the coin fell to $ 9,800 earlier this month. Bitcoin Up is now trading at just under $ 10,400 – still over $ 2,000 below its annual high.
While this was a steep decline, not everyone believes that Bitcoin’s uptrend is over.
Bitcoin holds crucial macro level
In fact, a crypto trader recently shared the chart below and commented that Bitcoin is holding a crucial macro-trending level – even after it crashed. As the chart below shows, Bitcoin held the blue cloud indicator during the 2017 bull run and previous uptrends – multiple times.
This suggests that the dominant macro trend is still bullish.
Another trader also notes that despite the decline, Bitcoin held a crucial macro level. He shares a chart that BTC printed two wicks on the middle Bollinger Band – a defining trend for bulls.
Charting BTC’s price action over the past year or so with an analysis of the Bollinger Bands by crypto trader Big Chonis Trading (@BigChonis on Twitter). Chart from TradingView.com
The trader who shared the former chart is a historically correct trader.
When Bitcoin fell to the $ 3,000 lows in March, there was one trader who said the cryptocurrency was ready to see a V-shaped reversal to $ 10,000 by May or June. The cryptocurrency did just that when it rose to $ 10,000 in May, meeting the prediction.
Old markets can push BTC below critical levels
While Bitcoin maintains important technical levels, the weakness in the legacy markets could cause the cryptocurrency to plummet even further.
Both Bitcoin , the stock market and gold have reached its peak a few weeks ago about the same time. It appears that the performance of the legacy markets, namely the dollar, dictates the general direction of BTC and Alts.
That means: If the stock market corrects further, this should also apply to cryptocurrencies.
However, Willy Woo, an on-chain analyst, believes that this correlation could break at some point.
“The SPX looks very weak and if it crashes I lean far out the window and say that BTC will decouple in the coming months. After halving and reducing the derivative trading volume, the selling pressure on BTC will be fundamentally reduced compared to the bullish fundamentals of an anti-inflationary hedge. “
When Bitcoin will do this – if at all – remains to be seen.