Bitcoin price tumbles 6% after 10 days of gains…now what?

Technical analysis can help forecast where prices are going by studying how they’ve moved in the past.

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The Bitcoin (CRYPTO: BTC) price is down 6% over the past 24 hours, currently trading for US$39,743 (AU$54,442).

The retreating price puts an end to Bitcoin’s 10 days of consecutive gains, its longest winning streak since 2013.

Earlier today, the world’s biggest crypto by market cap traded as high as US$42,563. But its failure to hold above US$42,000 means it could continue to struggle to move higher.

Where to next for the Bitcoin price?

Forecasting the price moves of cryptocurrencies isn’t a precise science. To say the least.

However, technical analysis can offer some useful insights by studying how prices have moved in the past and, therefore, how they may move in the future.

On that front, analysts quoted by CoinDesk believe Bitcoin will continue to see stiff resistance in the low US$40,000 range until it decisively moves and holds higher.

According to digital-asset firm Eqonex, “BTC is potentially rangebound until it breaks and closes above $42,000. Trendline support has moved up to $38,200, with $36,500 the next support.”

Head of sales at crypto derivatives exchange FTX Jonathan Cheeseman appears to agree on the importance of the US$42,000 price target.

Addressing what was still an ongoing run higher on Saturday, Cheesman wrote (quoted by Bloomberg), “A run like this certainly suggests some flow backing. Of course, it now needs to stabilize here – and above the high from May 20 would be further confirmation.”

20 May saw Bitcoin trading above US$42,500.

What will it take to get back above US$64,829?

In mid-April, Bitcoin hit all-time highs of US$64,829. Despite the 10-day long rally just ended, the price remains down 39% since that record.

So what will it take to get the token back into record territory?

According to Pankaj Balani, CEO of crypto derivatives exchange Delta Exchange, it boils down to higher prices begetting still higher prices. Balani wrote:

It won’t be surprising to see Bitcoin expand the $30,000 to $42,000 trading range on the upside and attempt $45,000. However, breaking above $50,000 will take some doing for Bitcoin. Only a conclusive break above $50,000 would attract fresh flows and signal a change in the broader direction for the market.

With the price currently heading in the opposite direction, it remains to be seen when – or indeed, if – the break above US$50,000 occurs.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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