With the rise of Bitcoin of more than 600% in the last 6 months, the recent pullback from the all-time-high of USD 64,000 has made some of the market participants a little bit more cautious, which is entirely rational given that the digital asset has had a tremendous stretch in this run. The news has also broken out that Tesla has sold more than USD 270 mn of its Bitcoin holdings, netting a profit of more than USD 100 mn . With the average price bought at around USD 30,000, Tesla is sitting comfortably in its holdings, but at the same time it gives a signal to the market that as Bitcoin sits on the company’s , it does not guarantee that the Bitcoin it bought earlier in the year will be held continuously; it will sell some when the price is “right”. This idea stroke an even more cautious tone over the crypto community about not being too , especially in the short term. Let’s take a look at how the price action is shaping up on BTCUSD:
Looking at the , the price action is shaping up to be pretty healthy after a few consecutive days of correction. We saw that on weekly open on Monday, the market saw the opportunity to scoop up Bitcoin at USD 47,000-48,000 region and bounced back nicely to what is now around USD 53,000 area. If the market structure stays in shape and USD 51,000 is protected by more Bitcoin buyers, it would not be a surprise to see BTC trading in the USD 55,000-57,000 region in the next couple of days. If that were to happen, by no means it will be a turnaround because technically speaking, Bitcoin staying at those levels would indicate a Lower High structure. Lower High structure implies that there is still a possibility that the asset might correct to a deeper level. If we do break the USD 51,000 level, it would not be impossible that we will see another retest to USD 47,000 area before possibly going lower to the USD 42,0000-43,000 region. That being said, let’s take a look into the smaller timeframe of the BTCUSD chart:
Similar to the , 12-hour chart does not indicate any weakness in the short term given that Bitcoin has just bounced from a pivotal USD 47,000-48,000 region. Should things stabilise, we can expect a grind up higher to the indicated price range at around USD 55,000-57,000 mentioned in the previous paragraph.
Overall, we should not be too provided that BTC had a strong uptick, despite the Tesla news that broke a couple of hours ago. But at the same time, it is the time to be more vigilant and cautious about overbullishness and market exuberance coming from the bounce. Bitcoin is possibly having a change in short-term trend, though the macro picture for the said crypto asset is still very , even at the USD 42,000-43,000 region.