There is a short-term pullback in the offing for Bitcoin, and trader Josh has it on his watch list. He sees a potential slide to the $63,500 support, but even with the current step back, the technicals point to a likely turnaround.
Overbought Conditions and Immediate Risks
In Josh’s view, the asset has been in a bit of a lull after entering overbought territory. The three-day chart shows some stubborn resistance at about $67,000. He is keeping an eye on the $63,500 level; should Bitcoin fail to defend it and fall below $62,500, that would be a red flag for a bearish move. At this point, it is all about holding ground above those numbers.
Bullish Divergence Offers Hope for Recovery
There is some near-term risk, to be sure, but a look at the weekly chart from a technical standpoint shows a pronounced bullish divergence. In line with what has been discussed on Crypto World, it is not out of the question for Bitcoin to have a brief respite before staging a comeback in the months ahead. Should the asset hold or even dip below the $63,500 mark and then recover, one could see a run up to the $72,000–$73,000 area. That would be the kind of outcome that validates the divergence and signals a market finding its footing once more.
Implications for Ethereum and the Wider Market
The spotlight is on more than just Bitcoin. A look at the numbers in Crypto World has some putting a $1,950 ceiling on Ethereum, with the expectation that ETH may follow in Bitcoin’s footsteps and retrace to that level over the next few days. Given how the ebb and flow of these two can dictate the mood for the rest of the market, there is an eye on them for any telltale signs of where things are headed.
To put it in a nutshell: there is no denying the near-term headwinds for Bitcoin that Josh has laid out, but then you have the bullish divergence to offset them, which could be the prelude to a recovery and a longer run up. Those in the market would do well to keep an eye on support and be prepared to make a move when the price does.
Source — Crypto World: https://www.youtube.com/watch?v=clGF8fkrBfk
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