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Analyst: Bitcoin to see far-reaching selloff after tapping range highs

Analyst: Bitcoin to see far-reaching selloff after tapping range highs

Bitcoin’s 2020 uptrend has once again extended even further, allowing the cryptocurrency to set fresh year-to-date highs earlier today when BTC rallied to over $9,800 before tapping some strong resistance that halted the rally.

Despite the overt bullishness of this movement, it is imperative to note that BTC was rejected at its range highs, signaling that this rally may soon stop dead in its tracks before turning into another downtrend.

One analyst believes that the downtrend resulting from rejection at these range highs will lead BTC all the way down to $7,500.

Bitcoin’s momentum stalls after it taps range highs

At the time of writing, Bitcoin is trading up over five percent at its current price of $9,660, which marks a notable climb from daily lows of $9,200, and a slight retrace from intra-rally highs of over $9,800.

This rally came about after a multi-day downtrend that led Bitcoin from highs of $9,650 to lows of $9,100, which is where bulls began stepping in and absorbing the intense selling pressure, subsequently leading to today’s uptrend.

Although on the surface today’s extension of the momentum seen throughout 2020 seems to be highly bullish, it is imperative to note that BTC was rejected at its range highs of roughly $9,800 today, signaling that this could be a local high.

C2M, an analyst focused on the crypto derivatives market, elucidated these range highs in a chart, showing that these range highs were set in November of last year.

Bitcoin BTC
Image Courtesy of C2M

Will BTC plummet to $7,500 before finding support?

As for how far the potential downtrend resulting from the rejection at these range highs could lead, Teddy – a well-respected crypto analyst – explained in a recent tweet that he believes it will drop until it hits the lower boundary of its wide trading range at roughly $7,500.

“BTC: Looking at the same range on a daily time frame price: 1. Pumped 2. Broke first resistance 3. Was stopped with surgical prevision on second resistance. Above it’s party time, strong rejection and we are testing lower side of range again.”

Bitcoin BTC
Image Courtesy of Teddy

The only way for this range rejection-induced downtrend to be avoided is for bulls to step up and propel the crypto above $9,800.

Bitcoin | BTC

Updated: Feb 5 at 10:17 pm UTC
$9,668.02
5.36%

Bitcoin, currently ranked #1 by market cap, is up 5.36% over the past 24 hours. BTC has a market cap of $175.98B with a 24 hour volume of $34.51B.

Chart by CryptoCompare

Bitcoin is up 5.36% over the past 24 hours.

Posted In: , Analysis, Price Watch
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Cole Petersen
Author

Cole Petersen

Journalist @ CryptoSlate

Cole is a freelance journalist and university student studying philosophy. He focuses primarily on covering cryptocurrency and blockchain-related news. He owns a non-life-changing sum of Bitcoin and enjoys day trading.

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