Bitcoin price reversed course in the past few days, unexpectedly correcting by 5%, but analysts said it was a healthy correction.
Bitcoin prices fell 2.5% on May 23, surprising traders who were sure the cryptocurrency would hit new all-time highs after rallying to $72,000 earlier this week.
Data from Cointelegraph Markets Pro and TradingView show that leveraged long traders were caught off guard as Bitcoin’s price suddenly dropped from a high of $71,980 on May 21 to an intraday low of $67,550 on May 23.
“Bitcoin is still following a similar path as in 2016-2017,” said independent analyst Jelle, reacting to BTC’s familiar pattern from previous cycles.
Jelle said that once Bitcoin breaks through its 2021 all-time high, it will enter a parabolic uptrend with a predicted Bitcoin price of $100,000.
Trader and analyst Mags explained that the current BTC correction could be a “false alarm,” a pattern that has been present since the $15,500 bottom.
“Prices consolidate in a range for a few weeks or months, then break out of that range, trapping all the shorts, before quickly recovering and rising again.”
BTC’s recent recovery above $65,000 has broken through “all key resistance levels,” including the 50-day exponential moving average (EMA), which is currently at $64,665.
This resulted in a “hidden bullish divergence,” further supporting Bitcoin’s uptrend.
BTC price is close to retesting the demand zone between $64,000 and $67,000, representing the neckline of the inverted head and shoulders pattern.
“Bitcoin broke out of the H&S line and closed above it. Breaking through the rest of $67,000 is always a possibility. So don’t panic if that happens. The overall structure is bullish on higher timeframes. Bitcoin tested the last resistance level before setting new all-time highs.”
The bulls would like to see the $67,000 support area (center of the range) hold. This suggests that the price will now range between $67,000 and the all-time high of $73,835.
The analyst explained that from a technical perspective, this range offers a high risk-reward to buy.
However, those who bet on BTC’s recovery from current levels suffered heavy losses on May 23 as the crash liquidated $159.3 million worth of long positions, bringing total losses to $227.51 million in 24 hours, according to Coinglass data.
With the latest withdrawals, $46.75 million in BTC leveraged positions were liquidated in the past hour alone, of which $39.6 million were long positions.
