Bitcoin stands a good chance of bottoming by the next few months, according to a technical analyst at Fundstrat.
The largest cryptocurrency has stabilised recently after falling about 50% from a record in November. According to a pricing model tracked by Fundstrat’s Mark Newton, there’s a “good likelihood” that the low for Bitcoin is coming by the spring months.
Still, he cautioned against getting bullish now. “This minor two-week bounce might still be premature in expecting a new intermediate-term rally has begun,” Newton said.
Among key technical levels to watch, prices moving above $40 000 would be important for bulls, he added. A decline under $35 511 would set up a test of $32 950, around the Jan. 24 intraday low, he said.
Bitcoin has declined in recent weeks amid a global rout in risk assets on growing concerns about a hawkish Federal Reserve. Tokens like Bitcoin and Ether are growing more correlated with assets like stocks as more traditional investors start to jump in.
Bitcoin was steady on Thursday, trading around $37,000 as of 7:36 a.m. in London.
Even if Newton expects a bottom sometime soon, he’s still thinking cautiously.
“Until $40,000 is exceeded on a daily close, it remains in a downward sloping pattern, and it’s tough to rule out further weakness technically speaking,” he wrote.
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