By CCN: Josh Rager, a cryptocurrency trader and technical analyst, expects a healthy pullback for bitcoin based on the historical performance of the asset in the past three years.
Since 2016, the bitcoin price has tended to correct by 30 to 40 percent following a strong short-term rally.
Although the historical performance of the bitcoin price is no guarantee of its future trend, coming off of a staggering 100 percent year-to-date gain, despite the strong momentum of the asset, some analysts have suggested the possibility of a large correction.
IS A 30 PERCENT DROP FOR BITCOIN POSSIBLE?
Like any other asset, bitcoin can become vulnerable to a minor correction if it surges by a large margin in a short time frame in a parabolic rally.
Apart from one occasion in the past week during which bitcoin experienced an abrupt drop to $6,400, the dominant cryptocurrency has more or less recovered without a large downside movement or a correction in the past month.
Since April 22, the bitcoin price has increased from $5,300 to $8,000, by nearly $2,700 within 30 days.
As such, several traders are anticipating a minor correction to occur given that the bitcoin price has surged without a dip in momentum.
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