Bitcoin erased some of its recent gains yesterday as it retraced $400, reflecting a near 10% drop that led a market-wide fall that tested the recent bullishness in the market. The fall was the first negative action Bitcoin had seen for over two weeks, and came just as predictions of $5,000 and beyond were doing the rounds on social media. While this drop is not considered catastrophic by any means, how much of an impact might it have on the short-term optimism in the market?
Happily, if sentiment is anything to go by, then the move isn’t particularly bad news. Luke Martin, a prominent voice on crypto Twitter, seemed to be expecting it, stating as far back as last week that $4,120 was his expected first major level of resistance. Sure enough, this was the general area Bitcoin rose to before the pullback, after which he has set two levels of importance.
Whatever you do – have a PLAN. I’m buying the 3700 $BTC pullback. If close below 3700 then I’ll cut.
Don’t copy me though. Instead, create a simple ruleset for yourself.
Example: If “_____” then I will “_____”. Prepping for good and bad scenarios means atleast 2 of these rules.
— Luke Martin (@VentureCoinist) February 24, 2019
In a sign of how predictable a pull back was, even CNBC predicted it, suggesting Thursday that Bitcoin could be in for a red day very soon. The usual trend, especially throughout 2018, was to counter-trade CNBC as they were more often wrong than right, but on this occasion they managed to get on the right end of a trade.
— CNBC Futures Now (@CNBCFuturesNow) February 21, 2019
Will Constantinople Lead to More Ethereum Gains?
Ethereum was hit with a 15% fall following its mammoth 57% rise this month. But, with the Constantinople upgrade just days away, if Bitcoin can hold at current levels then the potential is there for a rally in the forty-eight hours leading up to it, something that some feel has not been getting enough attention:
Why is no one talking about Constantinople? It’s the largest major technical update that the 2nd largest cryptocurrency has had in two and a half years. A successful transition for #Ethereum has the potential to truly usher in the next great alt season.
5. More. Days. ?
— K A L E O (@CryptoKaleo) February 23, 2019
However, given that a whale moved over 200,000 ETH from their wallet to Binance early Monday, there is the chance that further red days could be ahead either following, or just before, the upgrade takes place, which would fit with the ‘sell the news’ theory.
Bulls Still In Charge… For Now
In general, it seems that the short-term bullish sentiment has not been checked, and that as long as Bitcoin can stay at its current levels and not drop lower, another push past $4,120 and the next resistance level of $4,400 might still be on the cards. Long term, despite apparent evidence of Bitcoin shifting from a distribution to an accumulation phase, many still feel that yearly lows can still be printed, washing out the final few faint-hearted holders before beginning a new cycle again into the 2020 halving.