The last two weeks have been incredible for bitcoin prices. The digital asset has successfully broken out of a bearish bear trend and reached a two-month high in the process. However, with the recent pullback, there could be more pain for bitcoin investors before the rally continues.
Analyst Justin Bennett Says Bitcoin Below $20,000 Is Possible
In a recent edition of his crypto trading newsletter, analyst Justin Bennett revealed some bearish tendencies in the market. He first pointed out the fact that the market has made a good profit, adding 28% in value over the past 18 days. But as expected after the rally, the market correction has pulled down the price of the digital asset.
While there was speculation that this setback was only temporary, Bennett explained that it could go further. Currently, the analyst does not take away from the current bull trend of bitcoin, but presents a scenario where the price of the cryptocurrency can return below $20,000 before the rally continues.
BTC could see sub-$20,000 before rally resumes | Source: Cryptocademy
BTC has returned to the $20,000 region as of this writing, lending credence to Bennett’s analysis. However, with the key support for the digital asset currently resting at $20,000, bears can pull prices as close to this support as possible before the bears take over again.
“I think Bitcoin is higher towards $25,000 and potentially $29,000, but not without a pullback to the $20,000 area first,” Bennett said in his newsletter.
Factors Driving This Pullback
In the same newsletter, Bennett pointed to the release of PPI data that had upset the market. In the end, the anticipated release was lower than expected, causing fatigue in the market. Bitcoin has dropped below $21,000 as a result of this.
Also pointing to the US Dollar Index (DXY), analysts explained that the movement of the index on the back of the PPI data release will be bullish for assets such as BTC. “But I think the market has gotten ahead of itself, so a lot of the bullishness has been priced in,” Bennett added.
BTC corrects downward following rally | Source: BTCUSD on TradingView.com
Since this pullback has pushed the price of BTC dangerously close to the 5-day moving average, it should come as no surprise that the cryptocurrency was losing another couple of hundred dollars of value in the coming days.
However, the bullish trend is expected to continue shortly as trading volume remains high, and investor sentiment reaches a 9-month high, sitting very close to greed on the Crypto Fear & Greed Index.
BTC is trading at $20,779 at the time of this writing. Its price is down 2.18% in the last 24 hours, but up 14.54% in 7 days.