BTC/USD: Bitcoin may retest $7,500 if the bears regain the control

Bitcoin recovered from the intraday low of $9,236 to trade at $9,550 at the time of writing. Despite the recovery, the first digital asset has lost over 2% since the start of the day amid strong bearish sentiments that replaced the optimism after a failed attempt to break above $10,000 on Thursday.

From the technical point of view, $9,200 is regarded as a critical barrier that separates us from a deeper decline towards $8,100-$8,000 area that stopped the sell-off ahead of the halving. According to Nicholas Pelecanos, Head of Trading at NEM Ventures, if the sell-off materializes, BTC/USD may retest $7,500. However, the expert pointed out that if the bearish scenario materializes it will be less violent than in the middle of March due to the reduced number of leveraged positions on the cryptocurrency exchanges.

Generally the large sell offs we see in Bitcoin are amplified by deleveraging. A great example of what rapid deleveraging looks like can be seen in the mid March sell off that pushed the Bitcoin price down by 50%. Despite the price fully recovering since the sell off, the number of open leveraged positions are down between 25%-50% across major exchanges. This gives us a good indication that if a sell off begins to materialise, it will be of smaller magnitude than what we saw in March, he explained in a written comment to the FXStreet.

In the long run, Nicholas Pelecanos expects a strong bullish momentum based on positive fundamentals. A sustainable move above $9,800 may trigger the rally, he added.

BTC/USD daily chart