Over the past few minutes, Bitcoin has plunged lower, just now losing the key $10,000 price level, falling through it as if was not much more than a piece of soggy letter paper.
At the plunge’s worst, the cryptocurrency traded as low as $9,850 (on some exchanges), falling nearly 5% from the local top at $10,300 seen earlier today.
This move unsurprisingly caught many cryptocurrency traders with their pants down, with $15 million or so worth of Bitcoin long positions on BitMEX being liquidated during the drop.
Does Bitcoin Remain Bullish?
While this drop was harsh, many are certain that the cryptocurrency’s medium-term uptrend remains intact, for just a few days ago, Bitcoin was changing hands for $9,500; the fact the cryptocurrency remains at $9,900, above the ever-important $9,500 level, suggests bulls remain in control.
Trader Inmortal Technique shared the below chart on Tuesday, showing that Bitcoin’s bounce in the $9,500 region is similar to a previous retracement in the ongoing uptrend.
BTC following the path it took last time it saw a correction like the one we saw last weekend would mean it will push towards fresh highs past $10,500 in the coming days, highs likely around the $11,000 region.
The retracement we just saw from $10,300 does not invalidate this potential fractal playing out over the coming days.
Also, Bitcoin just printed an extremely positive signal on a longer-term basis: the 50-day simple moving average and the 200-day simple moving average crossed, with the former moving over the latter for the first time in nearly a year. Investopedia describes “golden cross” events like the one we just saw as the following:
As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes. […] It is interpreted by analysts and traders as signaling a definitive upward turn in a market.
Indeed, in 2019 Bitcoin rallied by nearly 200% from the time of the golden cross to the local top, and another golden cross in October 2015 preceded an over 6,000% move higher.
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