With the Bitcoin price seeing some recovery after crashing to $102,000, speculations now abound as to where the pioneer cryptocurrency could be headed next. So far, it has been a mixed bag, with some expecting a rally similar to the COVID rally to follow, and others believing that this is the start of the bear market. In the same vein, a pseudonymous crypto analyst has painted a clear picture of where they expect the Bitcoin price to go, depending on how it performs in relation to the midpoint level.
What Happens If The Bitcoin Price Stay Above the Midpoint?
Presently, the midpoint line is important to the performance of the Bitcoin price. This is because it lies firmly between the major support and resistance that were seen in the last few weeks. This puts the midpoint at around $111,994, marking the next decisive point for the cryptocurrency.
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As the crypto analyst explains, if the Bitcoin price is able to stay above the midpoint, then the next major resistance that it would need to beat lies at the 0.75 Fibonacci level. This translates to the $117,605 price level, making it the point where the bears could mount the most resistance, especially given the fact that this trend is bearish on the lower time frames.
Nevertheless, staying above this midpoint would mean that the trend remains bullish and in favor of the buyers. Thus, it would send the trend for a rally confirmation, and potentially lead the charge toward the next bid for new all-time highs. “A V-shaped recovery and move straight to the highs would be max pain after such a brutal move down,” the analyst stated.
Bears Could Still Reclaim Control
While the Bitcoin price staying above the midpoint is still bullish, there are way more bearish implications if the price breaks down at this level. The analyst points out that losing the midpoint level would mean that the Bitcoin price was once again open to backfilling the wick.
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This wick refers to the flash crash wick that was established last Friday, when the Bitcoin price fell to $102,000. The market continues to struggle to recover from the last crash, even with Bitcoin being above $110,000, and another breakdown toward $102,000 could be catastrophic for altcoins.
In support of the bearish thesis, another crypto analyst also pointed out that the Bitcoin price is exhibiting signs of distribution. With this, it is possible that Bitcoin could form a reversal pattern and continue the price downtrend. From here, the analyst sees the price eventually crashing below $100,000 before finding support.
Featured image created with Dall.E, chart from Tradingview.com