Bitcoin (BTC) Price Stumbles 11% Overnight, Drops to $8,300, Time to be “Greedy”?
Today’s Bitcoin (BTC) News
Crypto and indeed Bitcoin (BTC) markets are cyclical in nature. They tend to rise and fall in sync and after a year of bears, crypto did recover in Q1 2019. The question now is whether bulls will stage a comeback considering the shift in market psychology. However, the skepticism for higher highs is not deep rooted. If anything, the market is robust, firmer, smaller and more liquid that it was during the last bull rally that saw BTC spike to $20,000.
After last year’s 75 percent drop, Bitcoin base is broader and as it finds use, institutions are flowing in. There is infrastructure development. Furthermore, there are institutional grade custodial solutions available for high net-worth investors through Fidelity.
At the same time, retail investors are aware and in a recent study, it was revealed that more Americans below 35 years are willing to put their hard-earned monies into Bitcoin. That’s because it is an emerging tech that is slowly competing with Gold but is more censor-resistant, global and digital.
Those are some properties that set BTC apart from Gold. Then again, there is the undervaluation question especially when there is a comparison between the two assets market cap. With $7 trillion as market cap and consistently turning more than $2 billion in daily transactions, Gold as a physical asset with intrinsic value is preferred.
However, with changing investment landscape, expected flow into crypto and BTC in particular, even a $1 trillion market cap will automatically drive spot rates to $55,000. That’s more than twice 2017 peaks and roughly x7 prevailing BTC spot rates.
BTC/USD Price Analysis
1 BTC/USD =$60,701.7317 change ~ -0.39%
Evidently, Bitcoin (BTC) is fundamentally overvalued. But in the last 24 hours, bears are flowing back. After a steady, near perpendicular rise in BTC prices hauling altcoins from their lows, the world’s most valuable asset dropped more than $500 in yesterday’s New York Session.
That saw prices shrink to around the $8,100 mark. Although this could be a “normal” correction, a standout was the accompanying transaction volumes. May 30th bar had 31k in trading volumes against 16k average.
Compared to May 26th, yesterday’s draw-down was at the back of high participation levels. As a result, what we now have is a mark of bears. There is a three-bar bear reversal pattern off the $8,500 mark revealing a possible liquidation after prices topped $9,100 earlier this week.
Needless to say, buyers are technically in charge. However, this stand will only hold if BTC prices are capped inside the $1,000 trade range with limits at $7,500 and $8,500. If prices drop below $7,500 or the 38.2 percent Fibonacci retracement level of May trade range at the back of high volumes ideally exceeding 47k of May 17th, then odds are BTC would likely sink to $6,600 and later $5,600.
On the flip side, any recovery, wiping out May 30th losses and thrusting prices back above $9,000 at the back of high trading volumes exceeding 47k will confirm bulls of early April and May. Then, traders will be greedy, ramp up with targets at $10,000 and later $12,000.
All of Today's Bitcoin Price Analysis, Chart Forecasts and Industry News
All Charts Courtesy of Trading View—Coinbase
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.