Bitcoin Back In The Channel — Next Drop Looming?
Waking up to green candles feels much better, especially after a day like yesterday.
So, let's quickly summarize: Based on several factors (check this article for details), Bitcoin encountered one of the worst starts to a new week for a long time. Bitcoin lost 16% at its peak, while many altcoins were down 20% or more.
However, contrary to the last days, the U.S. investors did not intensify the selling pressure but started a recovery. As a result, Bitcoin closed the day with a minus of "only" 7%. More importantly, BTC did not close below the long-term channel.
The question everybody asks is, "What's next?" Will we see a sharp recovery, or are we going lower?
Pro Recovery:
- Bulls showed strength and recovered the price once it dipped below 50k, which was a vital sign.
- Moreover, the turbulences might force the national banks to cut rates faster than expected, which could add positive momentum.
- Plus, we have seen similar drops dozens of times—and a strong recovery right after.
Contra Recovery: Since the situation remains tense, it just needs some news, and we could see the next earthquake. The Middle East might be the most significant short-term risk factor in this context. Iran's expected retaliation against Israel could easily send the next shock wave across the market — and Bitcoin below 50k.
Summarized: The recovery looks good, and it was good to see bulls stepping in. In the short term, I remain cautious since we may see another drop. However, I expect that even another drop cannot push Bitcoin below 50k for longer, and we remain in the channel and bullish in the mid-term.
