A fall of such magnitude usually drives away the bulls or at least keeps them at bay until the market stabilizes, but that is not what happened.
The bulls aggressively purchased the dips, which led to a sharp recovery, suggesting that the sentiment is bullish and traders expect the rally to continue in the next few days.
Daily cryptocurrency market performance. Source: Coin360
Meanwhile, Goldman Sachs is bullish on gold and forecasts a target of $2,300 per troy ounce before the end of 2022. The main reason for the continued rally in gold according to the analysts at Goldman is the “record level of debt accumulation” and “real concerns around the longevity of the US dollar as a reserve currency.”
While Goldman Sachs only talked about gold, both the same logic could be applied to Bitcoin. Even if Bitcoin only manages to retest its all-time high before 2022, it still would have outperformed gold by a huge margin.
Bitcoin corrected from just below the $12,304.37 level on Aug. 2, as suggested in the previous analysis. It dipped to an intraday low of $10,525, which completed a retest of the breakout level from the inverse head and shoulders pattern.
BTC/USD daily chart. Source: TradingView
The buyers purchased the dip on Aug. 2, which is a huge positive as it suggests that the sentiment has turned bullish. If the sentiment was weak, traders would not have stepped in to buy at $10,500.
Due to the fall on Aug. 2, the relative strength index corrected from its overbought levels, suggesting that the weaker hands have been shaken out.
The bulls will once again attempt to carry the BTC/USD pair above the resistance at $12,113.50. If they succeed, the uptrend is likely to resume with the next target at $13,000 and then $14,000.
This assumption will be invalidated if the pair turns down from the…