Bitcoin (BTC) is on the verge of falling back below $50,000 as a massive daily candle wick shocks analysis.
Popular trader CrypNuevo recently warned in a X report that recent BTC price volatility could lead to Bitcoin hitting six-month lows.
BTC price history shows that the wick will be “filled” in a few days.
Bitcoin managed to bounce back above $5,000 from its low of $49,500 recorded on August 5.
However, there is still no consensus on where BTC/USD is headed next, with opinions diverging as the day’s dismal losses subside.
There is reason for concern for CrypNuevo, as he points out that historically, large wicks caused by volatility tend not to wait long before prices turn around and “fill out.”
He uploaded a description chart showing that it usually takes several days for such a process to begin.
“I’ve included all the long wicks that can be applied to the wick filling strategy since March on this chart so that you can see the situation objectively,” part of the attached commentary added.
“I don’t know exactly when this new long wick will be filled, but it will be soon.”
In another post, CrypNuevo mentioned an interesting element of the BTC price bounce. CrypNuevo admitted that the bounce occurred at a key level.
“We are exactly 50 percent off the level of the previous long-term wick,” he concluded.
Analysis: It Might Be Time to Consider Buying Bitcoin, Ether
Other market participants were cautiously skeptical that both Bitcoin and the largest altcoin, Ether (ETH), may have already bottomed out.
Related: Bitcoin Speculators Lose $850 Million as BTC Price Plunges Below $50K
Among them was trading firm QCP Capital, which framed the massive leverage flush as a sort of cathartic event for the bulls.
“A significant amount of leverage was lost due to yesterday’s risk-off crash,” he wrote in a recent announcement to subscribers of his Telegram channel.
“With prices falling off a cliff, it’s probably time to start thinking about accumulating BTC and ETH spot.”
QCP was also optimistic about the macroeconomic outlook going forward, arguing that the US Federal Reserve is unlikely to implement an emergency rate cut, which would cause further market panic in the process.
“Asset prices are likely to remain volatile and markets are expected to continue to fluctuate until clarity is provided on policies from the Fed and the Bank of Japan, with a key update expected on Wednesday from Bank of Japan Deputy Governor Shinichi Uchida and an announcement at the Fed’s Jackson Hole meeting on August 22-24,” he said, citing upcoming clues from the Fed and the Bank of Japan.
According to data from Cointelegraph Markets Pro and TradingView, BTC/USD was trading around $55,000 at the opening of Wall Street on August 6.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.