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Bitcoin ($BTC) Technical Analyst Points to Key Support Level to Watch
Technical analyst Katie Stockton, founder of Fairlead Strategies, has predicted Bitcoin ($BTC) could soon see a relief rally that would be muted over the ongoing downtrend in the market. The analyst pointed to key support levels to watch.
Stockton, while speaking with Bloomberg, noted that Bitcoin and most altcoins “have been trending lower for some time,” but noted the magnitude of the sell-off has been “a bit shocking in terms of downside momentum.”
The technical analyst added that “with this kind of decline support levels are being taken out,” with the last support level being “broken decisively enough that we’re already on the next support level.” These support levels, Stockton noted, are long-term levels.
A support level, it’s worth noting, refers to a price level from which an asset does not fall below for a period of time. That level is created by buyers entering the market at that level as it’s seen as a buying opportunity.
Per Stockton, BTC’s price level Fairlead Strategies is watching is “about $18,300 to $19,500” based on Fibonacci retracement levels, which are levels associated with specific percentages based on the Fibonacci sequence, which was first developed and used by ancient Indian mathematicians, according to Investopedia.
The technical analyst added equities should see a short rally “this week or the next couple of weeks,” although she expects the downtrend and correlation between cryptoassets and equities to hold over the medium-term. Per Stockton, such a correlation is “normal” as risk-off sentiment reigns in the markets.
Bitcoin, the analyst, is “shaking out a lot of the weaker holders in the cryptocurrency market” while holding as a “bit of a safe haven” in the cryptocurrency space, as it’s outperforming various altcoins through the down cycle. She added:
I don’t think it’s going to shake them out indefinitely. I think it’s a matter of watching for momentum to shift to get that kind of basing phase in place and that’s where confidence will be restored.
Weaker companies, the analyst said, are not likely going to survive, although she expects some great opportunities to arise as the market starts to recover. These opportunities could come with less volatility, which “is natural as an asset class matures.”
Institutional interest, Stockton said, is expected to keep growing over time. Equities are also “in a volatility regime,” which is affecting investor confidence. By some metrics, the analyst said, the “high-growth arena” is “deeply oversold by some metrics.”
Late last year, as CryptoGlobe reported, Stockton predicted the flagship cryptocurrency could rise to $89,000. As reported, the world’s largest BTC spot exchange-traded fund saw outflows of over $500 million late last week, which could have triggered the flagship cryptocurrency’s crash to a low under the $18,000 mark.
Featured image via Unsplash
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