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Bitcoin pulled back on Wednesday, dropping to about $55,500 before closing the daily candle just above $56K. This is a somewhat bearish candle as Bitcoin gets rejected from the $60K resistance level yet again and breaks below the short-term ascending trendline, pointing to another possible test of support around ~$51K before the uptrend resumes.
Bitcoin's fall likely had to do with the Japanese Kimchi exchange's premium retracing back to spot price, which at one point was trading near a 20% premium of Bitcoin's spot price, resulting in prices close to $70K. Bitcoin's reversion to the mean in Japan likely was perceived as negative in the spot market and thus induced some short-term selling. However, this doesn't change our view that Bitcoin's trend is up and, at most, will retrace to our buy zone closer to the 50 Day EMA just north of $50K.
Bitcoin's RSI is relatively low for a bull market, indicating a "cool off" period of Bitcoin as it has been consolidating in this $10K range between $50K - $60K since January when it initially rallied up to $58K.
As you can see in the chart above, Bitcoin's year has consisted of rallies up and smaller corrections which are buying opportunities. If the past is an indication of what's likely to happen again, then the dip opportunity was a week ago and now Bitcoin should see an explosive green candle above $60K any day now.
We should expect a rally of similar magnitude up to the $70K level or maybe even $80K in the near-term. We should expect to see moves in $10K intervals, taking us up to at least $70K in the near-term, although we haven't really seen the market price in the alarming supply crisis going on on digital currency exchanges.
If Bitcoin were to get rejected around the $58K - $60K level and fall back lower, this could reopen the door back down to $50K where Bitcoin will need to find support else risk a drop to $48K where there's the 50 Day EMA.