With the market still jittery after successive $BTC drops of $12,000 and $7,000, many who sold might be wondering if it’s safe to get back into Bitcoin. The Bitcoin trendline is holding, and so is the $95,000 horizontal support. How far can this bounce go?
Two flash crashes in succession wipe out leverage
The last crypto flash crash is still very much in the minds of many, and certainly in the minds of those who were liquidated, as Bitcoin fell heavily once again on Monday and Tuesday.
It also needs to be borne in mind that the huge $12,000 BTC crash from top to bottom was only a week ago. If these two crashes did anything, they certainly cleared out most of the leverage in the system, giving the market a clean slate with which to go forward.
With Bitcoin now looking to be fully embarked on its recovery, the impact from the huge MicroStrategy buy of $2.1 billion in BTC could now be permeating through the market. That the U.S. Spot Bitcoin ETFs bought a further 4.51K BTC on Tuesday should also help.
The introduction by Google of their Willow quantum computing chip perhaps brings some slight nervousness to the market. This chip of 105 qubits has been demonstrated to solve tasks in minutes that supercomputers would take a huge amount of time to complete.
That said, while this is another big step forward in quantum computing, a chip with the amount of qubits required to break the encryption of Bitcoin must still be quite a way off. Estimates as to the amount of qubits needed for this would be in the millions, or even billions of qubits.
Major support holds for $BTC
Source: TradingView
The 4-hour chart for $BTC displays how the price is still continuing to respect the ascending trendline, and the candle wicks below are testament to the strong buying coming into Bitcoin when any sign of trouble appears.
The $BTC price has entered resistance now, but it is likely that the bulls will try to push the price up and through the 0.618 Fibonacci at $99,000. Above this is the 0.786 Fibonacci at a price of $101,000. If the bulls can force the price up through these levels it could be game-on again.
$BTC triangle breakout?
Source: TradingView
Looking a bit further out into the 12-hour time frame, it can be observed that the $BTC price could be bouncing within a triangle pattern. If the price can continue to the top of the triangle, and the Stochastic RSI at the bottom of the chart would point to this being a distinct possibility, a breakout would have a measured move to around $111,000.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
