Bitcoin price is correcting gains from the $31,400 zone. BTC could revisit the $29,200 support or even $28,500 before it starts a fresh increase.

• Bitcoin is currently correcting gains from the $31,400 zone.
• The price is trading below $30,500 and the 100 hourly Simple moving average.
• There is a connecting bearish trend line forming with resistance near $30,550 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could continue to correct lower toward the $29,200 support or $28,500.

Bitcoin Price Starts Downside Correction

Bitcoin price remained well-bid above the $29,500 resistance zone. BTC cleared the $30,000 resistance to move further into a positive zone. Finally, there was a push above the $31,000 zone.

The price tested the $31,500 zone. A high is formed near $31,435 and the price is now correcting lower. There was a move below the $30,500 level. The price traded below the 50% Fib retracement level of the upward move from the $29,550 swing low to the $31,435 high.

Bitcoin price is now trading below $30,500 and the 100 hourly Simple moving average. There is also a connecting bearish trend line forming with resistance near $30,550 on the hourly chart of the BTC/USD pair.

The pair is trading close to the 76.4% Fib retracement level of the upward move from the $29,550 swing low to the $31,435 high. If the price remains stable above the $30,000 level, it could soon start a fresh increase. On the upside, the price is facing resistance near the $30,400 level and the 100 hourly Simple moving average.

Source: BTCUSD on TradingView.com

The first major resistance is near the $30,550 level and the trend line, above which the price might revisit the $31,400 resistance zone. The next major resistance is near the $32,000 level. Any more gains could send the price toward the $32,500 resistance zone.

More Downsides in BTC?

If Bitcoin’s price fails to clear the $30,550 resistance, it could continue to move down. Immediate support on the downside is near the $30,000 level.

The next major support is near the $29,550 level, below which there is a risk of a move toward the $29,200 support. Any more losses might send the price toward $28,500 in the near term.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is below the 50 level.

Major Support Levels – $30,000, followed by $29,550.

Major Resistance Levels – $30,400, $30,550, and $31,400.

By the completion of its daily candle on Wednesday, Bitcoin had gained over 18% in just seven consecutive sessions, abruptly ending the steady drift lower which had dominated its price action since Bitcoin put in its mid-April high above 30,000. How unusual is this magnitude gain in only a week’s time, and what’s happened in the past after similarly robust rallies? Let’s take a closer look at Bitcoin’s price history to find out.

Bitcoin’s Price History Suggests Higher Prices Ahead

As we examine Bitcoin’s price history for which there is reliable data (2011 to the present), the number one cryptocurrency by market cap has experienced numerous instances of gains greater than or equal to +18% over the span of seven days.

Bitcoin gains >= 18% in Seven Days | BTCUSD on TradingView.com

Because the number of occurrences will vary depending on holding time, we’ll start by listing the number of times this has happened next to our hypothetical hold times of 7 days through 90 days. Holding time is defined as the amount of time one held Bitcoin before exiting. For example, if one hypothetically purchased Bitcoin following the trigger event (i.e., +18% over the span of seven days) and sold it 30 days later, this would be a holding time of 30 days.

Bitcoin Occurrences of +18% Gains in Seven Consecutive Days by Holding Time (2011 – Present)

• 98 occurrences using a 7-day hold time
• 73 occurrences using a 15-day hold time
• 57 occurrences using a 30-day hold time
• 30 occurrences using a 90-day hold time

Clearly, gains of this magnitude in just a week’s time are not uncommon for Bitcoin, an asset with numerous instances of large price advances especially when considering its relatively short price history compared to traditional risk assets.

Bitcoin Results Slightly Less Bullish In Recent Years

While a gain of over 18% in such a brief time period may lead some traders to lean bearish, the data suggests otherwise, with historical average results clearly positive across the board for all holding times from 2011 to the present.

Bitcoin gains >= 18% in Seven Consecutive Days with Various Hold Times. 2011 – Present.

Because Bitcoin’s early price history experienced arguably outsized gains relative to its more recent history, let’s take a look at average results for the same degree of gains in a week’s time but only examining data for the last five years (6/23/18 to the present).

Bitcoin gains >= 18% in Seven Consecutive Days with Various Hold Times. Last Five Years.

While once again results are positive across the board, the hypothetical results over more recent data are significantly lower, with the average 90-day return of +25.6% over the past five years a far cry from the +109.4% returns for the same 90-day window over the full price history from 2011 to the present.

While some traders may argue that the past five years is less representative data due to the occurrence of two major bear markets for Bitcoin and crypto more broadly, Bitcoin has shown positive follow through on average for both time periods across all the hold times we examined. While the past does not predict the future, the recent powerful price advance appears to suggest that Bitcoin is poised for greater gains in relatively near future.

Bitcoin, the leading cryptocurrency by market capitalization, seems to have entered a phase of consolidation above the $30,000 mark following a notable surge of over 10% on Tuesday.

While the price movement has generated a lot of interest among investors, it remains uncertain whether Bitcoin will maintain its upward momentum or experience a pullback in the coming days.

Bitcoin Uncertain Trajectory

Ben Lilly, a well-known cryptocurrency analyst, and economist, recently shared his thoughts on the current state of Bitcoin’s price action and its potential future trajectory.

In a recent analysis, Lilly dubbed the current price movement the “Larry Fink Pump,” referencing the recent announcement by BlackRock’s CEO Larry Fink regarding the company’s increased interest and application for a Bitcoin spot ETF.

While the pump has caused some excitement among investors, Lilly notes that several factors could cause the rally to falter.

For one, Bitcoin has already wiped out the remaining high-leverage liquidity to the upside, and the Cumulative Volume Delta (CVD) spot seems to have lost its short-lived trend already.

Additionally, the fuel meter discussed in a recent Alpha Bites episode by Benjamin Skew of Jarvis Labs LLC has dropped significantly from its pre-pump levels, which could indicate a bearish case for Bitcoin in the short term.

Despite these potential bearish factors, Lilly remains optimistic about Bitcoin’s future. He notes that the $24,000 level is still sitting there and could be had if the price breaks the 200-day moving average, which is currently creeping above it. If this happens, he predicts that Bitcoin could drop to $21,000-$22,000.

However, Lilly also sees the possibility of an upside scenario for BTC. He notes that low-leverage liquidity sits at $32,000, and he would “love to see it taken out.”

Looking at the returns by trading session, he points out that the New York session seems to be leading the way. He notes that when the trend of the New York session ends, there’s a bit of a lag before the price responds to the downside, suggesting that the June options max pain of $25,000 may not happen.

Lilly also highlights the recent increase in the whale holding chart, as seen in the chart below, which indicates that large Bitcoin holders, commonly referred to as whales, are once again accumulating the cryptocurrency.

This is the first time a trend like this has been observed since mid-January, suggesting that there may have been significant accumulation happening before the recent surge in BTC’s price.

Related Reading: Is Chainlink The Most Undervalued Altcoin? It’s Do Or Die For LINK

Overall, Lilly concludes that investors should not be quick to fade this Bitcoin rally. While there are potential bearish factors at play, there are also several bullish indicators. Investors should track the data to see if the trend continues and be prepared for potential volatility events in the future.

At the time of writing, Bitcoin has maintained a stable price for several days. The cryptocurrency is currently trading at $30,100 and has managed to stay in positive territory, with a slight increase of 0.6% over the past 24 hours.

Featured image from Unsplash, chart from TradingView.com