Richard Branson once said that “Business opportunities are like buses; there’s always another one coming” and this holds true with Bitcoin.
As Bitcoin edges closer to recouping April’s high of $64,854, this presents yet another make-or-break moment for the entire crypto market, with some quarters preparing for the worst in expectation of a massive dump.
Even worse, novice traders/investors are the most vulnerable lot as they flock in to buy tops once FOMO kicks in.
Buying Into Major Resistance
There is a reason why seasoned investors will always abide by the rule of “looking left” before buying into an asset. April’s all-time high of $64,854 is the most critical barrier to break for Bitcoin to print new highs. Logically, this level is expected to present some form of resistance with options of price temporary dumping being on the table.
Scott Melker popularly known as “The Wolf of All Streets” rules out the possibility of a double top forming as a 50% drop from the confirmation neckline along June’s lows could send Bitcoin to roughly zero. He is however alive to the fact that the $28,800 floor is still a reality in the current situation should price choose to play out in a range.
“There is no double top. There is no potential double top. Even if there was you can’t trade it until $28,800.”
Another technical analyst, Gareth Soloway says that it would be suicidal to buy into April’s highs as anything could happen below that resistance. Instead, he asserts that his decision to go long would be informed by price breaking “and closing above” that ATH.
“Lots of wild bulls continue to go nuts but ultimately, the 65k (confirming) is the level. That is the end all/be all level per past cycles. Be careful as this hype is based on the #Bitcoin futures ETF debuting. So far 65k not taken out, let’s watch the price action into next week”
Citing Accumulation Dips
Accumulation dips are basically price consolidation patterns that emerge after the price has rallied before recoiling upon reaching certain levels as initial buyers take partial profits or fully liquidate their long positions.
These patterns which form sideways are usually more obvious in hindsight giving long-term buyers the opportunities to accumulate.
As seen in the chart below, after Bitcoin’s price surges, it has a moment to “breath out” creating price squeezes that are depicted inside the white borderlines. Buying after price breaks out of these patterns to the upside minimizes the risk of buying in too early or getting caught in a bull trap.