Analyst Expects Bitcoin Price to Break Below $8,500; Here’s Why
- Bitcoin is maintaining its interim support level near $9,100, but an analyst expects the price to break bearish towards $8,500.
- The trader forecasted the downside move days after Bitcoin established a second-quarter top near $10,500 on June 1.
- The cryptocurrency has since accurately moved as predicted, further raising the possibility of a breakdown ahead.
Bitcoin may undergo an aggressive sell-off in the coming weeks.
The downside risks surface as the benchmark cryptocurrency cautiously trades above $9,100, accompanied by lackluster volume and record-low volatility. Traders are showing a clear bias-conflict, unable to open traders in either direction as the price action becomes almost motionless.
An $8,500 Bitcoin
The ongoing sideways trend prompted one analyst to predict further downside moves in the Bitcoin market. It is the same trader who, on June 3, accurately forecasted a bounce towards $10,000. His later predictions about an extreme pullback also came true.
The analyst now sees Bitcoin extending its bearish correction towards $8,500 or lower. In a chart published ahead of the New York trading session Wednesday, he highlighted the cryptocurrency leaving behind a trail of lower lows and lower highs, indicating a downtrend.
Bitcoin chart showing its extended negative trend following a rebound from $10,500 on June 1. Source: CryptoCapo, TradingView.com
He also spotted levels that served as the last point of supply (LPSY) in the market. As shown in the chart above, each of Bitcoin’s local pullback levels flashed traders’ inability to inject money into the market. That reflected their underlying conflict towards a bull market.
“Consolidation below $9,300 and it should go to the range low ($8200-8500),” the analyst said in early June. “That would be the decision point, in order to know if it’s SOW or Spring.”
He added that breaking below $8,200 could also expose Bitcoin towards lower levels, starting with $7,000 and bottoming near as low as $1,000.
More Bearish Signals
Bitcoin’s flat price action also prompted other market observers to see its price declining in the coming sessions.
Josh Olszewicz, an analyst associated with Brave New Coin, said in a Wednesday tweet that he finds bias in an “awkward spot.” He highlighted bitcoin’s weakening bullish momentum using a popular technical indicator known as the Ichimoku Cloud.
“Cloud still shows weakening bullish momentum. If you are bearish, you want an e2e to 7.1. If you are bullish, you want a TK cross [to] recross above Cloud with a $13k target.”
Bitcoin price chart showing its Ichimoku Cloud indicator pointing to a weakening upside momentum. Source: Josh Olszewicz, TradingView.com
Meanwhile, the analyst who predicted a bitcoin price plunge towards $8,500 also noted that invalidation of his forecast would push the cryptocurrency back above $10,000.