The price of Bitcoin has solidified its position slightly above $65,000, which is considered a key support level. Crypto traders are confident in the stability of this formation and are starting to doubt the possibility of a significant correction in the near future.
One pseudonymous crypto trader, Yoddha, with a following of 49,000 X followers, expressed their belief that Bitcoin’s strong hold on its price makes a deep correction unlikely. They shared this sentiment with their followers on May 18.
Another pseudonymous crypto trader, Rekt Capital, pointed out that a significant correction event has already occurred. According to CoinMarketCap data, the price of Bitcoin fell by 15% from $66,421 on April 24 to $56,792 on May 2. Rekt Capital stated that with a combination of a deep and long correction, the bottom is likely to be close.
Despite the previous correction, Bitcoin’s price rebounded above the critical support level at $65,146 just four days later on May 6. Some traders view this trend as common during bull runs, where normal corrections are sharp and quick with a quick bounce back.
Mags, a crypto trader, referenced the typical market graphics sheet, the Wall Street Cheat Sheet’s “Psychology of a Market Cycle,” to highlight that Bitcoin is entering the “belief” phase of the cycle. This phase signifies a point where investors become more confident in market gains.
Analysts and observers are closely monitoring Bitcoin’s price for signs of further correction, especially since the recent Bitcoin halving event on April 20. Past halving events serve as a precedent for predicting potential price movements. For example, after the halving in May 2020, the price of Bitcoin surged from $9,383 to $58,958 by May 2021. However, it experienced a 40% correction, dropping to $35,484 in June.
Some analysts believe that scrutinizing Bitcoin’s price chart is futile until it breaks out past $70,000 and approaches its all-time high again. Quantum Economics founder Mati Greenspan explained that breakouts are what excite traders, so analyzing the charts without a breakout is not worthwhile. Pseudonymous crypto trader PlanC also emphasized the importance of disregarding short-term price action.
In conclusion, while there are speculations about a potential deep correction, many crypto traders remain optimistic about Bitcoin’s price stability. The recent rebound above the critical support level and the belief phase of the market cycle contribute to this positive sentiment. Analysts continue to monitor the price for further signs of correction, focusing on potential breakouts and the achievement of new all-time highs.