The price of Bitcoin shows signs of stability above $ 10,000, with traders explaining where is heading the next big BTC move.
The price of Bitcoin (BTC) has been levitating between $ 9,800 and $ 10,500 for nearly a week after falling from $ 12,100 on September 1. While BTC struggles to show any distinctive price movement, traders are generally cautious.
In the medium and long term, traders expect Bitcoin to rebound and perceive the ongoing consolidation phase as a healthy pullback. From July 16 to August 17, Bitcoin rose from $ 9,005 to $ 12,486 on Coinbase, with a pullback that is arguably necessary to neutralize the futures market.
Vinokuorov stated that the decline is a potential set of benefits for Bitcoin in the coming months, as the rejection of prices is not a negative development if the market calmed down as a result. He also said that the leverage and speculative flow of traders are eager to align after a period of consolidation:
“Price discovery and consolidation after a sharp rally is an indication of a healthy market flow both ways. Price rejection is not necessarily a bad development as it allows market to take stock of the situation and try to align the interests of both the leveraged/speculative flow and those of the long-term holders. “
The long-term outlook for Bitcoin
Heading into the fourth quarter of 2020, analysts stay neutral or bullish on the Bitcoin price trend, and an abundance of technical and fundamental factors could keep sentiment around BTC firm from November to December. Historically, BTC had a strong performance in the last two months of the year. Most notably, BTC hit a new all-time high in December 2017.
Possible technical catalysts include the closing of the monthly Bitcoin candle above $ 11,600 for the first time since 2017, and reaching the resistance level of $ 12,000. Although briefly, it marked a major breakout after falling to a low of $ 3,596 on BitMEX in March 2020.
The short-term Bitcoin bullish scenario would lead to a retest of the $ 11,000 resistance level, based on the chart above. A bearish scenario would cause another drop to $ 9,000, potentially leading BTC to the CME gap of $ 9,650 that has yet to be filled.
Since Bitcoin whales often mark the top and bottom of BTC, there is a strong possibility that BTC will fall to $ 8,800, which was identified as a buying area for them. An anonymous trader recognized as “Salsa Tekila” said: “If BTC falls 30 to 45 percent from the top as in 2017 (past performance does not predict the future), it would take us between $ 6,850 and $ 8,650.”
But Hirsch commented that in previous opportunities: “We have seen these rallies a number of times, so I would not be surprised if a bitcoin rally occurred this year as well.” Furthermore, Vinokourov believes that Bitcoin could retest the $ 12,000 mark soon as “the number of Bitcoins locked on Ethereum continued to rise even as the total amount locked across the ecosystem decreased.”
By: Jenson Nuñez.