Bitcoin Dropping to $6K ‘Golden Pocket’ Isn’t Bearish, Says Trader
A classic Fibonacci retracement could land BTC/USD at $6,300 or lower and still not disturb the long-term trend.
Bitcoin (BTC) could crash to $6,000 and still remain bullish, one trader claimed on June 26 as the largest cryptocurrency tested $9,000 support.
In a Twitter analysis, the popular trader known as SteveCrypt0 offered an alternative to the bearish sentiment coming from markets this week.
Trader: $6K is “healthy correction”
With BTC/USD circling $9,200, analysts are broadly risk-off. Broad correlation with ailing stock markets has sparked multiple warnings that a failure to keep support at current levels could spell a fresh downturn.
For SteveCrypt0, however, even a worst-case scenario would not necessarily spell the end of the Bitcoin bull case.
BTC/USD could hit $6,300 or even lower, he argued, and still retain its overall uptrend. The reason, he said, lies in the fact that a Fibonacci retracement level lies at $6,340.
“We could go as low as 6300 or even dip to 6k and still be bullish,” he commented.
“In fact, it would even be a healthy correction right into the golden pocket of the 0.618 Fib level.”
BTC/USD chart showing Fibonacci retracement level. Source: SteveCrypt0/ Twitter
Bitcoin follows stocks downhill
Fibonacci lines represent a keen area of interest for Bitcoin traders eyeing short-term support. A 61.8% retracement versus previous highs is nothing new for BTC/USD — Bitcoin has shown an affinity for doing just that in recent times.
This time, $6,340 is the retracement relative to the recent highs of around $10,200 seen in early June.
In April, Cointelegraph noted that the same theory called for a pullback to $5,300, a month after 2020 lows of $3,600. Such a scenario did not play out.
Bitcoin’s performance meanwhile is likely to remain dictated by macro factors. On Thursday, veteran trader Tone Vays sounded the alarm about weakness in the S&P 500, together with a lack of nearby support levels.
By WILLIAM SUBERG