The past two weeks have been incredible for the price of Bitcoin. The digital asset was able to successfully break out of a depressed bearish trend, reaching two-month highs in the process. However, with the recent pullback, there may be a little more pain for Bitcoin investors before the upward rally continues.
Analyst Justin Bennett says Bitcoin under $20,000 is possible
In his new issue cryptocurrency trading newsletter, analyst Justin Bennett reveals some of the market’s bearish tendencies. First, he points to the fact that the market has enjoyed a significant amount of gains, adding as much as 28% to its value in the last 18 days alone. But as expected after such a rally, a market correction pulled the price of the digital asset back.
While there has been speculation that this withdrawal will only be temporary, Bennett explains that it could go much further. The analyst is now not taking away from the bullish trend that Bitcoin is currently in, but rather presents a scenario where the price of the cryptocurrency could go back below $20,000 before the recovery resumes.
BTC could see sub-$20,000 before rally resumes | Source: Cryptocademy
BTC has already fallen back into the $20,000 area at the time of writing, lending credence to Bennett’s analysis. However, with key support for the digital asset now sitting at $20,000, the bears could pull the price as close to that support as possible before the bears take charge again.
“I like Bitcoin higher towards $25,000 and potentially $29,000, but not without a return to the $20,000 region first,” Bennett said in his newsletter.
Factors leading to this recall
In the same newsletter, Bennett points to the release of PPI data which overwhelmed the market. In the end, the much-anticipated release came in lower than expected, causing market fatigue. Bitcoin fell below $21,000 as a result.
Also pointing to the US Dollar Index (DXY), the analyst explained that a move on the back of the PPI data release would be bullish for assets like BTC. “But I think the markets have gotten ahead of themselves, so a lot of that bullishness has already been included,” Bennett added.
BTC corrects downward following rally | Source: BTCUSD on TradingView.com
As this drop has pushed the price of BTC dangerously close to the 5-day moving average, it should come as no surprise if the cryptocurrency loses another few hundred dollars in value in the coming days.
However, the bullish trend is expected to continue soon as trading volume remains high and investor sentiment hits 9-month highs and is very close to greed on the Crypto Fear & Greed Index.
BTC is trading at $20,779 at the time of writing. Its price has fallen by 2.18% in the last 24 hours, but is up by 14.54% in the 7 days.