Bitcoin: Experts advise investors to prepare for Chop fest ?

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Well-known trader Peter Brandt says, no matter how confident we are in the future, the market always brings surprises. And considering this, the expert believes that Bitcoin has reached the bottom and we are waiting for Chop fest in the near future.

However, be prepared for a fair amount of volatility, Brandt says.

He himself builds his strategies based on the weekly Renko chart.

Bitcoin has risen by more than 15% over the past 2 days.

And this is primarily due to the withdrawal of the SEC lawsuit against the head of Ripple, as well as fresh news about the imminent approval of the BTC-ETF by the SEC. The media also reported that allegedly BlackRock has already started buying Bitcoin for the needs of its ETF.

But the rapid growth may also be related to the aggravation of the situation on the CDS market. By the way, BTC added +55% during the month of the banking crisis in the US, when we saw a series of bankruptcies of regional banks. In case the situation repeats, the current growth of BTC may continue.

The current BTC growth was also accompanied by the strongest “short squeeze” in the last 3 months. In just 2 days, sellers lost more than $200 million. At the same time, the ratio of bets on the growth and fall of BTC in options shows the outweighing of the former: 65.43% vs. 34.57%, which indicates the likelihood of the continuation of the downward movement.

According to analysts from Glassnode, bitcoin has successfully overcome significant psychological and technical barriers, reaching a mark close to $28,000. This success is estimated to be the result of not only technical parameters, but also the internal dynamics of the network.

Preliminary analyses based on monitoring capital flows between long-term investors and short-term speculators indicate that the structure of the current bitcoin market is similar to the recovery periods following the dominance of bearish trends in 2016 and 2019.

Technical Outlook

The price approached the resistance level in the range of 34,000 – 35,000, and also reached the upper boundary of the ascending (red) channel. In case the price manages to overcome the 35,000 mark and the channel boundary, the road to the next resistance level in the range of 37,000 – 38,000 will be opened. The price has also reached the maximum oversold level since mid-January this year, although this did not coincide with a price reversal last time. Just the fact that the 31400 – 31,800 level broken yesterday was not tested by price may indicate a likely correction.

Bottom Line 

If we get another positive news about the positive results of the cryptocurrency companies’ fight with SEC, the timing of BTC-ETF approval or if something “shaky” starts to happen in the US economy again, I do not exclude further growth of BTC/USDT. We should consider buying when the price consolidates above 35,000 with targets in the range of 37,000 – 38,000. At the same time, the absence of news may lead to some stabilisation of the price and even a possible correction and retest of the support level in the range 31400 – 31 800. It is possible to consider sell trades in case of price reversal from current levels.