After a week of pain, the Bitcoin bulls are pushing back.
Perhaps many are realizing the pullback was a gross overreaction to ETF news from the SEC.
While some argue that Bitcoin is doomed to fall to $4,000, we’re not so sure. We have to remember the SEC is still set to make its decision on a Bitcoin ETF in late September 2018.
Investors are overlooking the fact that the SEC never rejected the ETF in its decision to delay.
That’s because there’s no reason for rejection, as pointed out by SEC Commissioner Hester Peirce. She has made it very clear there is “no reason to not allow” the ETF.
Bitcoin could Bounce to $6,500
If the cryptocurrency can push back to $6,500, it’ll be a technical sign of strength. If it can hold that level, Bitcoin could potentially move to $6,900, in our opinion.
On a one-year chart of Bitcoin, the coin caught support dating back to February 2018.
At the same time, it’s wildly oversold at its lower Bollinger Band (2,20), where it has a historical tendency to bounce. In fact, it’s done so with a test over the last seven months. At the same time, Williams %R (W%R) is deep in oversold territory under its 80-line.
Each time, the Williams %R drops this low, and the coin is at its lower Band, we’ve seen a bounce.
History Tells us BTC is Ready to Bounce
In February 2018, BTC fell to its lower Band at $6,000. W%R was below its 80-line. Shortly after, BTC rallied from $6,000 to $12,000.
In late March 2018, BTC fell to its lower Band at $6,000. W%R was below its 80-line. Shortly after, BTC rallied from $6,000 to $10,000.
In July 2018, BTC fell to its lower Band around $5,920. W%R was below its 80-line. Shortly after, BTC rallied to $8,374.
Granted, these indicators won’t work 100% of the time, but they’re great indicators to watch.
In fact, they’ll also tell you when to jump out of the coins, too. Historically when BTC hits the upper Bollinger Band and Williams %R moves above it 20-line, BTC pivots lower.
It’s not just BTC, though. If you pull up any technical chart with Bollinger Bands and W%R, you’ll clearly see the patterns.