Bitcoin's price recently went up to $72,000 but seems to be struggling at this point.
Some analysts like John Bollinger believe a short-term price drop might be coming based on technical indicators.
Despite the short-term concerns, Bollinger is still optimistic about Bitcoin in the long run.
One analyst, James Check used the concept of "escape velocity" to suggest Bitcoin might be nearing a breakout point before an explosion.
Overall, analysts point to serious resistance around $73,000, due to profits held by the short-term traders.
Investors got a taste of the finer things this week when Bitcoin entered a bullish craze and rallied all the way from the $62,000 zone to the $72,000 mark in a space of 10 days.
However, the cryptocurrency’s bears seem to be particularly strong around this $72,000 price level, and Bitcoin is starting to show signs of weakness.
John Bollinger—the creator of the famous Bollinger Bands indicator—has just weighed in on the conversation.
It turns out that Bitcoin might be in for a wild ride over the short term.
In a recent tweet, John Bollinger identified what he believes to be a concerning Bollinger band pattern on Bitcoin.
The concerning Bitcoin pattern
“I am not fond of the two-bar reversal at the upper Bollinger Band for BTC/USD,” the analyst said. “[this] suggests a consolidation or a pullback. Not bearish here, just short-term concerned.”
In essence, Bollinger believes that while Bitcoin is still very bullish over the long term, its short-term "two-bar reversal" pattern indicates that we might be about to see some turbulence around $72,000.
This outlook is echoed by another analyst, Ali in a recent tweet.
Sell signal on Bitcoin
Ali mentioned the TD sequential indicator, noting that it has shown reliable buy/sell signals on Bitcoin since February.
This time around, however, this indicator shows a sell signal on Bitcoin, which is historically a bearish signal.
In any elementary physics class, the word “escape velocity” refers to the minimum speed an object needs to possess, to break free from the earth’s gravitational hold and launch successfully into space.
Applying this to Bitcoin, analyst, James Check believes that Bitcoin is approaching this “escape velocity”.
Escape velocity on Bitcoin
In a recent newsletter, the analyst opined that Bitcoin may be close to this velocity, but isn’t quite there yet.
This means that the cryptocurrency would need to return and possibly break above its previous all-time high around the $73,000 price range, to mark the start of this launch into space.
The analyst buttressed his points using the short-term holder (STH) market value to realized value (MVRV) metric, which currently indicates that the market isn’t yet “overstretched, overbought, and over-saturated.”
In essence, the outlook is that Bitcoin is currently in a steady, enthusiastic phase of the bull market, where the transition from enthusiasm to straight-up mania can happen very quickly.
Check outlined that the $73,000 mark is where the short-term holders (traders who have held for less than 155 days) are at "sufficient profit", meaning that Bitcoin might be in for quite some resistance when it comes to breaking above this price level.
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