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- Bitcoin has now entered a consolidation phase within the mid-$9,000 region following the meltdown seen yesterday
- This has made it increasingly unclear as to which direction the benchmark cryptocurrency will trend over a mid-term time frame
- One analyst is calling into question the long-term strength of BTC’s multi-month uptrend due to the “V-shaped” recovery it posted in mid-March when it dipped to lows of $3,800
- He eludes to the possibility that this provided the crypto with a weak foundation upon which a sustained rally can’t be built
Bitcoin and the aggregated crypto market saw some calm overnight trading following the immense volatility seen yesterday.
After plunging from highs of $10,400 to lows of $8,600 on BitMEX, BTC has been able to incur some buying pressure that has given it a firm standing within the mid-$8,000 region.
Despite the rebound from these lows, it does appear that the cryptocurrency’s macro outlook may be somewhat weak at the present moment.
This weakness stems from the fact that Bitcoin’s entire rally from the upper-$3,000 region has been built upon a sub-10 day accumulation phase.
One analyst believes this could spell trouble for what comes next.
Bitcoin’s Mid-Term Outlook Gloomy Following Latest Decline
At the time of writing, Bitcoin is trading down over 4% at its current price of $9,600.
It appears to have entered a consolidation phase around its current price region following its recent dip to lows of $8,600 on BitMEX.
It is important to keep in mind that this latest decline came about after a period of immense strength, in which BTC pushed from $8,800 to highs of $10,400 in a one-week period.
The five-figure price region, however, remains firmly insurmountable, with this latest rejection marking yet another lower-high that could spell trouble for where Bitcoin trends in the mid-term.
It is still trading up significantly from its multi-month lows of $3,800, and it does appear to be caught within a macro-uptrend.
If it confirms the emerging “triple top” formation that it has been posting as of late, it could soon cut into some of these gains.
BTC Flashes Signs of Macro Weakness Due to V-Shaped Recovery
One analyst is now noting that the so-called V-shaped recovery seen by Bitcoin’s price in mid-March is a grave sign for its near-term trend.
He explains that strong trends are built upon strong foundations – with the market’s foundations being accumulation phases.
While Bitcoin’s previous uptrends were preceded by massive multi-month accumulation patterns, this one came about incredibly sharply.
“A strong market moves off a strong base. Accumulation. The run to 14k came off a ~130 day accumulation period. The move to 10.5k came off a ~50 day accumulation period. This recent accumulation period was less than 10 days. Same with the SPX too. Foundation is key,” he said while pointing to the chart seen below.
Image Courtesy of CryptoISO
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BTCUSD, BTCUSDT, XBTUSD