Outstanding bitcoin trader and technical analyst, Pentarhudi, According to the BTC, the price could drop to $ 6,000. The forecast comes after the brutal decline of the $ 10,500 level on June 2.
Pentarhudi is highly regarded for its technical analysis of Bitcoin from 2015, when the price of BTC was around $ 200.
Before the 14% decline on Tuesday, the trader suggested that the rise could initiate a four-year bull market. However, their analysis, released on March 12, found that only a break above the $ 10,500 resistance level would confirm a new rally.
As Bitcoin rose almost above the multi-year resistance level, it was eventually rejected. It prompted Pentarhudi to propose a new scenario: a possible withdrawal to $ 6,000.
Why is Bitcoin price dropping to the $ 6,000 region likely?
As Bitcoin’s price dropped to $ 3,600 on March 12, It rose nearly 180% in less than three months, peaking at $ 10,440.
The data shows that the first phase of the recovery from $ 3,000 to $ 7,700 was mainly driven by retail and institutional markets.
Open positions and volume on the Bitcoin futures exchanges increased rapidly from USD 7,700. The retail recovery led to an increase in futures, which led to increased volatility.
From May 8-10, Bitcoin’s price dropped about 20% from $ 10,050 to $ 8,100 within two days. Similarly, on June 2, BTC declined 12% in two days and saw higher volatility.
The increasing vulnerability of Bitcoin’s short-term price trend, increasing volatility and the formation of “triple peaks” on the daily BTC chart are the main factors that can cause a drop to USD 6,000.
“Triple peaks daily … bearish pattern. It will trigger a closing price below $ 8000 with a target of $ 6000.”
Bitcoin Triple Spike Formation on the daily chart. Source: trade view
Triple spike formation refers to Bitcoin’s three attempts in the past eight months to exceed $ 10,500.
In October 2019, February 2020, and May of the same year, Bitcoin rose to $ 10,560, $ 10,549, and $ 10,440, respectively. In the following weeks, the BTC price fell by at least 30% due to local peaks.
There is a basic bullish variable
The difficulty of mining Bitcoin decreased again as the hash rate of the Bitcoin network decreased. This means that it has become easier for miners to mine BTC as there are fewer active miners on the network due to falling prices.
Cryptocurrency analyst Nunya Bizniz said:
Bitcoin’s difficulty settings change the miners’ difficulty in finding blocks. They happen every 2 weeks. Today’s difficulty adjustment was -9.29%. This is the seventh setting of this level of negativity or less. Note where they occurred in relation to the price. “
Previous settings for Bitcoin mining difficulty. Source: Nunya Bizniz
Historical, Every adjustment of the mining difficulties was followed by a bullish cycle. The last time an adjustment was made, the price of Bitcoin was $ 5,800. It recovered to $ 10,440 over the next two months.