coindesk.com
Bitcoin’s BTC$78,705.37 attempt at $80,000 has traders looking at higher targets, but analysts say what happens during the next pullback may be the real test of the rally’s strength.
The cryptocurrency has been flirting with the $80,000 mark for the past day, a move that follows a sharp rebound over the past week and has left bitcoin up about 27% over the past month.
Chris Sullivan of Hyperion Decimus said the break above key moving averages, rising volume and improved market breadth point to a possible change in trend. But the rally has also left bitcoin overbought, he said, making a pullback necessary to test the strength of the move.
Sullivan is watching the $67,000-$70,000 range as support if the retreat becomes more pronounced. He also warned that previous crypto bear markets have produced sharp short-covering rallies that were later erased.
Ryan Lee, chief analyst at Bitget Research, expects bitcoin to trade between $74,000 and $81,000 in the near term. A move back toward $75,000-$76,000 would fit with traders taking profits after the recent surge, he said.
Hashdex Chief Investment Officer Samir Kerbage also sees room for bitcoin to cool before making another attempt higher. He said consolidation between $75,000 and $83,000 would help the market build a base.
“The region between $80k and $90k has very little historical volume, and price tends to move through thin zones quickly, for better or worse,” Kerbage said. “Some consolidation between $75k and $83k would be healthy to build a base. A sustained move above $83k might open the path toward testing the $100k area.”
The lack of historical trading in that range means there are fewer past transactions that could act as natural areas of support or resistance. In practice, that can leave bitcoin prone to sharper moves in either direction once it enters the zone.
The bigger question is who buys next.
Short sellers closing losing positions helped push bitcoin higher during the recent rally. Lee said the market now needs spot demand, including institutional purchases, to take their place. Continued inflows into spot bitcoin exchange-traded funds (ETFs) would strengthen the case for another move higher.
A sustained push above $80,000 could open a path toward $82,000-$87,000, according to Lee.
Joel Kruger, market strategist at LMAX Group, is also looking higher. He said bitcoin’s move through $67,300 and $70,000 provides evidence that a significant cycle low may already be in place. He sees $83,000 as the next major upside level.