Bitcoin (BTC) Likely To Retest Yearly Low This Week

Bitcoin (BTC) is currently trading sideways after a series of crashes and meltdowns that completely shattered the bullish resolve. The bears are still too confident and the bulls are nowhere to be seen. The price was in position for a swift recovery last week but the bulls missed their chance. Now, it appears that the bears will have the upper hand in deciding the short term future of Bitcoin (BTC). The above chart for BTC/USD shows the price trading in a descending channel. It is likely that the price will continue to trade in this channel till it retests the yearly low. Some might argue that Bitcoin (BTC) already tested the yearly low last week and there is no need for another retest, but that is not entirely true. In fact, Bitcoin (BTC) did not retest the yearly low last week.

As a matter of fact, a gap was left when Bitcoin (BTC) failed to successfully retest the yearly low last week. This means that there is a high probability that Bitcoin (BTC) will fall again to fill that gap before continuing upwards. A lot of investors coming from traditional markets take these things very seriously. If a stock shoots up without filling a gap, investors do not feel confident buying for long term. This is because they expect the price to fall back at some point to fill that gap. Bitcoin (BTC) may be due for limited downside short term but the big picture remains intact, same as before. There is a halvening event around June 2020 before which the price of Bitcoin (BTC) is going to prepare for a major breakout. The bear market for Bitcoin (BTC) is now close to its end.

That being said, it is going to be a long time till we see Bitcoin (BTC) back above $10,000 again. Under the current circumstances, it is unlikely that we will see Bitcoin (BTC) meeting Tom Lee’s target of $15,000 by year end. In fact, as the BTC/USD weekly chart shows, Bitcoin (BTC) has already begun the week in red and is expected to continue trading downwards to fill the gap that was left last week. Of course as the price nears its yearly low, a lot of retail bears are going to feel a lot more confident again and they are going to bet on further downside.

However, as the weekly RSI shows, BTC/USD has broken a major downtrend which has now become a strong support. The price of Bitcoin (BTC) does not have significant room for further downside, but as the price falls again we will see a lot of short positions piling up on exchanges. We believe that the whales are going to exploit this situation and a lot of retail bears are going to get hurt. Remember, a trend reversal never happens until one side is completely exhausted and defeated. The bears have to get hurt before a trend reversal which is only going to happen in case of a short squeeze when the bears take the upcoming retest for another crash.