The most valuable cryptocurrency sold off more than 20% in recent weeks after topping out just below $65,000 amid the Coinbase IPO. Bitcoin broke below $50,000, which represents a key psychological level for investors, but has since recovered and is trading near $55,000 as of Wednesday afternoon.
Now, bitcoin has found support near $47,000, which coincided with a “9” count buy signal generated by the DeMark indicator. This counter-trend indicator, created by Tom DeMark, helps measure price exhaustion in securities.
Traders should look for bitcoin to move above $62,000 to affirm that the sell-off is over, according to Lee.
“If this [$47,000] holds, and is likely, given this was a level prior to the last ‘sell countdown,’ bitcoin going to rally,” Lee said.
A potential target bitcoin could rally too is $69,000, representing potential upside of 25% from current levels, according to technical analyst Katie Stockton of Fairlead Strategies.