Bitcoin's (BTC) toll has been showing extreme levels of volatility as it consolidates under a key level of $10,000. The toll dropped to as low as $eight,100 on May 11, merely a twenty-four hours earlier the highly anticipated mining reward's halving.

Post-obit the 20% drop, traders remain divided on where the Bitcoin price would go next, with some traders believing that BTC could immediately come across an upsurge to the $fourteen,000 to $fifteen,000 resistance expanse.

Historically, when Bitcoin's price saw an extended rally, information technology went past key resistance levels with ease. For instance, it took BTC 28 days to increase from $8,000 to $20,000 in December 2022. In June 2022, Bitcoin's price rose from $7,500 to $14,000 in just iii weeks. And so, BTC'south price has the tendency to increase by a large margin in a short period of fourth dimension, peculiarly when met with huge demand from retail investors.

However, other traders foresee Bitcoin'due south price testing lower support levels afterwards its fall to $8,100. Given that Bitcoin vicious post-halving in the last two halvings, technical analysts expect BTC to retest the mid-$6,000 region at the lowest.

Bullish scenario for Bitcoin mail service-halving

The primary bullish scenario post-obit Bitcoin'southward cake reward halving is a breakout of a major trendline above the $xiv,000 marking, which dates back to 2022. In the past yr, Bitcoin's price moved within a large multi-year cycle established by its record loftier at $twenty,000 and its June 2022 peak at $14,000. Every time Bitcoin's toll got shut to breaking out of the range, it was met with a fierce rejection.

Bitcoin's price in a multi-year cycle dating back to December 2022

Bitcoin's price in a multi-year bicycle dating back to December 2022. Source: Satoshi Flipper

If the electric current Bitcoin momentum is overwhelmingly potent and breaks out of the multi-yr trend, there is a possibility that it will trigger a major uptrend. Cryptocurrency trader Satoshi Flipper said:

"I'm however betting on breaking through the upper trend line resistance and toll activeness heading northward. No fashion are my convictions changing because some clowns sold their BTC and price tanked 1 day."

A Bitcoin technical annotator known as "Galaxy" echoed a similar prediction, saying that the final time BTC saw seven consecutive weekly candles, a 160% increase followed. In the terminal 7 weeks, Bitcoin'south price continued to increase without major pullbacks, which terminal happened in Dec 2022. Post-obit the seven weeks, the price surged from $3,100 to $14,000 in only vii months by June 2022. Galaxy said:

"Look what happened the last fourth dimension nosotros had 7 consecutive greenish weekly candles. Nosotros had a 'doji' candle, followed by a 160% increase. By the looks of it, we're in for a ride."

Bitcoin weekly fractal between early 2022 and 2022

Bitcoin weekly fractal between early on 2022 and 2022. Source: Galaxy

Bitcoin's optimistic medium- to long-term trend based on fractals and technical indicators is further fueled by the entrance of loftier profile investors into the cryptocurrency market. In an interview with CNBC, billionaire hedge fund manager Paul Tudor Jones said that the trust in Bitcoin will increment as time passes. He emphasized that the nugget is only 11 years old and that it is in an early on phase of growth. Jones said:

"When it comes to trustworthiness, Bitcoin is 11 years old. There is very little trust in it. Nosotros are watching the birth of a store of value. Whether that succeeds or non, only time will tell. What I do know is that every twenty-four hours that goes past and Bitcoin survives, the trust in it will get up."

Given the influence of Jones in the financial market, there is a possibility that other institutional investors may follow his lead to invest in Bitcoin. Grayscale already recorded more than $380 1000000 in institutional investments in the offset quarter of 2022, which supplements the bullish scenario of Bitcoin after the halving.

The bearish scenario for BTC in the short term

In the short-term, several cryptocurrency traders anticipate Bitcoin's cost to drop to as low as $half-dozen,500. There are strong arguments to be made for a temporary bearish price trend later the halving. A confluence of Bitcoin nearing a major overhead resistance at $10,500 and historical data suggest a steep fall following a halving.

According to Bitcoin trader "Dave the Moving ridge," if the cost of BTC continues to motility based on a fractal taken from 2022, it is probable to come across a pullback to the $vi,000 region:

"If the fractals keep to hold, time to starting time thinking near consolidation levels. 50% consolidation in existent terms would put BTC in the 6K range. All good for going forrard."

$6,400 is a key pivotal point for BTC's price

$6,400 is a key pivotal signal for BTC'due south price. Source: Dave the Moving ridge

The mid-$6,000 surface area in betwixt $6,400 and $vi,600 too carries meaning historical importance. In the 3rd quarter of 2022, Bitcoin'southward toll dropped from $10,500 to $half dozen,410. It consolidated in the $vi,000 range for four weeks before breaking out to $10,500 once once again in Feb 2022.

A drib to $vi,400 would solidify the mid-$6,000 support area, strengthening the Bitcoin rally for a more robust extended uptrend in the second half of 2022. A cryptocurrency trader known as "Wolf" raised a similar concern. Bitcoin's price has moved within an ascending triangle blueprint since its abrupt recovery from $three,600 on March 12.

The sudden cost drop to $8,100 on May x led the formation to break, technically leaving Bitcoin vulnerable to a severe correction. At the fourth dimension, cryptocurrency investor Scott Melker said that the market observed a strong shakeout. Melker added:

"That was the highest hourly volume candle since the ballsy crypto doom fest on March 12th. I won't exist rushing into a position until this shakes out a bit. That was some real deal selling we just witnessed."

Bitcoin at risk of breaking down from an ascending triangle

Bitcoin at chance of breaking downward from an ascending triangle. Source: Wolf

A pullback from the $10,000 level would provide some stability into the market after a 160% rally within a two-calendar month span. Bitcoin's toll rose by nearly threefold with barely any corrections that left technical analysts worried most the sustainability of the upsurge.

Possible variables that may affect the short-term price trend of BTC

In the short-term, Bitcoin'due south price faces two major variables: a sudden inflow of upper-case letter from institutional investors and capitulation from modest miners. Considering that institutional investors allocated hundreds of millions of dollars into Bitcoin during the beginning three months of the yr, the probability of a larger amount of capital inbound the market after the halving is high.

Barry Silbert, the CEO of Grayscale, said in a tweet that his investment house reached $3.vii billion in avails under management on May 9, an all-time high for the company. Grayscale said in its Q1 study:

"Hedge Fund Investment Gains Steam: 88% of inflows this quarter came from institutional investors, the overwhelming majority of which were hedge funds. The mandate and strategic focus of these funds is broadly mixed and includes Multi-Strat, Global Macro, Arbitrage, Long/Short Disinterestedness, Consequence Driven, and Crypto-focused funds."

In contrast, a variable that may cause a Bitcoin downtrend in the near-term is the possibility of capitulation past small-scale and overleveraged miners. After the halving, the breakeven toll of mining will hover between $12,500 and $15,000, depending on the difficulty of the mining as the TradeBlock study explained at the start of 2022.

While the cost of mining Bitcoin is probable to be lower than almost estimates, even at the everyman forecast of $12,525, miners will be operating at a loss for at least several months. The relatively low price of Bitcoin opens BTC up for a miner capitulation, forcing small-scale miners to sell BTC. Digital asset director Charles Edwards tweeted:

"This will be the almost cruel Bitcoin Halving in history. Production cost is about to double to $xiv,000. seventy% above the electric current cost. Concluding halving, price was only 10% below Production toll, and Price & 60 minutes collapsed -20%. Without FOMO now, expect a big miner capitulation. 30%+"

Both variables are not likely to touch Bitcoin'southward price in a meaningful way in the firsthand-term, equally they represent extreme scenarios. BTC is now at a critical juncture that may decide its price tendency over the next 12 months, and generally, traders remain long-term optimistic near the price trend of BTC.