A popular crypto analyst is digging into the charts to determine whether or not the sudden rally of Bitcoin (BTC) is sustainable.
In a new strategy session, Michaël van de Poppe tells his 165,000 YouTube subscribers that BTC retesting the $40,000 level is likely to result in market volatility.
“It’s a very hectic day heading into the weekend… The FOMO [fear of missing out] is increasing across the markets as people feel left out…
Bitcoin has been breaking out heavily after a slight bounce from $36,000. Another test happened at $37,000 and then we started to shoot up… And we have been liquidating a ton of shorts as the volume is increasing significantly.”
The crypto trader next looks at the Bitcoin chart in order to figure out where BTC may be headed next.
“The question becomes whether we are having a fakeout or a sustainable move as the volume is the highest as we have anticipated since the actual crash occurred.”
Van de Poppe says Bitcoin will face topside resistance in the entire region between $40,700 and $41,500.
“That is the previous range of support likely to test resistance as this is the first time that we’re testing that level.
If we break through it, however, I’m assuming we’re going to see a test of $44,200 but definitely moving towards $46,000.”
Van de Poppe does expect many people to sell around the $40,700 level which will put pressure on BTC back towards $38,400.
“The way we’re going to do that is the question here.
If we’re going to do it today already or in the next 24 hours, it is a fakeout… and then we are probably done and going to test lower levels.”
The analyst cites the $38,900 level as crucial support if Bitcoin has a chance for continuation. If the line buckles, he thinks BTC could fall down into the $33,000 to $34,000 range.
“We’re getting into an environment where you have to stay focused given that we are approaching higher-timeframe resistance, and we could be flipping a level for support.
If we’re going to consolidate a little while here and staying above $39,000, the odds are increasing that we get towards $44,000 to $46,000.”
Van de Poppe concludes by laying out two possible scenarios.
“I’m not buying into $40,500 the first time that we’re testing that level after the actual market breakdown. If we flip it, I think we’re continuing to $46,000.
If we drop back from $40,300 back beneath $39,000, it’s going to be a heavy, heavy correction, and I’m assuming that we’re going to test the lows again.”
At time of writing Bitcoin is rallying in a big way, up 10.78% to $41,449.
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Source: https://dailyhodl.com/2022/02/05/is-the-bitcoin-bounce-a-fakeout-top-crypto-analyst-updates-outlook-as-btc-climbs-above-40000/