Bitcoin has shaken out many of the market’s weak hands following the latest correction. Though a short recovery. is on the cards, bears abound.
Bitcoin Primed to Rebound
The flagship cryptocurrency took a 23% nosedive after rising to a new all-time high of $58,500 on Feb. 21. The downswing pushed BTC to a low of $44,900 recently, generating nearly $6.50 billion in liquidations across several derivatives exchanges.
Despite the massive losses incurred within such a short period, the pioneer cryptocurrency could be preparing to rebound.
The Tom Demark (TD) Sequential indicator presented a buy signal on BTC’s 4-hour chart. The bullish formation developed as a red nine candlestick.
Such technical pattern forecasts that Bitcoin could be bound for a one to four 4-hour candlesticks upswing before the downtrend resumes.
A spike in buy orders around the current price levels that helps validate the TD setup’s outlook might see Bitocin rise to $53,000, based on IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model.
Here, over 720,000 addresses had previously purchased more than 550,000 BTC.
Given the strength of this supply barrier, it is likely that it may absorb some buying pressure. Holders within the $53,000 range may try to break even in their positions as prices rise, fueling another leg down.
That said, investors must pay close attention to the $46,200 support level as it is the only barrier preventing further losses. Failing to hold above this critical demand wall could be catastrophic for those betting on the upside.
The IOMAP cohorts show that the next significant support wall sits around $40,000, representing a 16% downswing from the current price levels.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.