At the time, the cryptocurrency was trading at $7,789.48 on Bitfinex and had lost over 14 percent from the local high of $9,090 it posted on May 30th.
In just eight days, we’ll discover whether this prediction was right.
Bitcoin gonna fall to $4’800 in the next two weeks.
— Russian Market (@russian_market) June 5, 2019
Russian Market has been around since January 2011 and has a significant following among movers and shakers in the Crypto Twitter community. The account has over 111,000 followers.
Why Bitcoin Looks Bearish
There’s no doubt that bitcoin is printing multiple bearish signals. On the shorter timeframe, the bulls are working really hard to stay above support of $7,600. Failure to do so might ignite tremendous selling pressure that can send the market down to support of $6,200.
A look at the 4-hour chart shows that bitcoin is painting a head-and-shoulders pattern. This is a trend reversal pattern that indicates that the market has topped out. To exacerbate the situation for the bulls, the cryptocurrency has printed two consecutive lower highs. The lower highs tell us that buyers are starting to lose interest. More importantly, the strength of $7,600 as a demand area is being drained every time the market relies on that price level for support.
Thus, if our read is correct, another bearish onslaught at $7,600 might just be enough to breach the support. Should that take place, the breakdown from the head-and-shoulders pattern will be triggered. The target of the breakdown is support of $6,200.
Parabolic Burst Favors Analyst Price Target
The big red candle on the daily chart that brought bitcoin down to $7,670.96 on June 4th effectively ended bitcoin’s impressive parabolic run. We suspect that this price action prompted Russian Market to forecast that the cryptocurrency would drop to $4,800 in two weeks.
From a technical analyst’s perspective, the logic behind Russian Market’s price target is sound. When parabolas implode, they tend to return to the origin of the move. This happens because the steep climb up leaves no room for base building. Thus, there’s no support that can impede the ensuing selldown.
In bitcoin’s case, $4,800 appears to be the origin of the parabola. We agree that the cryptocurrency may very likely revisit this price level before resuming its ascent. However, it won’t happen in the next week or so
Bitcoin’s $6,200 Support is as Strong as it Gets
During the 2018 crypto winter, it took bears 280 days to take out the $6,200 support area. That timeframe is a testament to the strength of the support.
Therefore, it would be highly unreasonable to expect bears to take out this strong demand area in a week or so. If anything, we can expect the market to bounce furiously after hitting this support – and that takes time. This is why we believe that $4,800 in eight days is not happening.
Bitcoin might drop to $4,800, but it won’t happen soon. Worst case scenario is that the market wicks down to $4,800 and bulls aggressively buy the dip. However, that might take place in a month or so from today, not in eight days as predicted by Russian Market.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.