- Yesterday, bitcoin challenged $10,000 yet again but dived back to $9,200.
- Bitcoin’s price is still trading near $9,600 but as per the technical indicator, the next leg higher might be harder to come by.
The world’s leading cryptocurrency had its historic event, halving earlier this week and since then, BTC’s price has jumped over 10%. Halving also has many crypto enthusiasts betting on another bitcoin bull rally, akin to the previous two halvings.
“If bitcoin can go above the big, round level $10,000, it will give hope to the whole crypto market,” said Alex Kuptsikevich, a senior financial analyst at FxPro, adding BTC is currently “defying gravity.”
But having’s effect could also be seen soon and some of the miners might “start selling their assets to cover the losses.”
Now that the halving is past us, the focus has turned to bitcoin as an inflation hedge especially after Jerome Powell warned this week that the U.S. is facing an “extended period” of weak economic growth and called out for more stimulus.
Recently, famed investor Paul Tudor Jones said he’d been buying bitcoin, owning almost 2% of his assets in BTC, amidst the massive central bank money printing.
Dose of Hopium
This week, bitcoin made several attempts to take over $10,000 but it hasn't been able to keep above this, a resistance level that dates back to October.
The moving average convergence divergence gauge (MACD) also shows the smallest positive divergence since this uptrend began which suggests bull would need strong support in order to breach this important level.
“I don’t think the fight will end there — a break of $10,000 would be very bullish for the cryptocurrency and we’ve all seen what that can lead to,” wrote Craig Erlam, senior market analyst at Oanda.
“The previous peak around $10,500 may provide some resistance above, but the next real test will be $11,000.”
But with bitcoin, anything is possible as economist and trader Alex Kruger says, “We could easily see BTC at 15K-20K in 2020.”
He explained how crypto twitter is not the market and the breakout will eventually come which will run over some short-term traders who don't’ adjust fast and reward holders. Kruger said,
“Think of Bitcoin as an immense pressure cooker and you will see what I mean. The lid on this cooker is being kept on by call sellers and derivatives hedgers. Once the lid pops, it will be gone for a while. Just need to keep the fire on long enough for it to pop.”
A dose of opium is also shared by Raoul Pal, the CEO, and founder of Real Vision who says the BTC’s price can reach $476,000 in the long term. He said,
“If it becomes an ecosystem, and we believe it will be and it will take the whole ecosystem with it as well, then yes, I think a $10 trillion number is easily achievable within that process.”
Sprinkle of Bears
Amidst the Fed going brr… the crypto market is seeing growth in fundamentals and price. Also, new users continue to enter the market. This has crypto exchanges on a hiring spree, Kraken being the one of them which hired 100 people in the last three weeks.
But not everyone is bullish. “The history of other deflated investment bubbles suggests that we won’t be seeing Bitcoin back at new highs any time soon,” said Tim Hayes, chief global investment strategist at Ned Davis Research.
Bear Majinstein believes crypto will tank when stocks start crashing, despite bitcoin decoupling from the equity market this week. He said,
“Current crypto pump is funny. All markets are about to get squeezed down again, because institutional risk models GET REKT on high volatility + high covariance.”
But he is bearish on pretty much everything except for the likes of rice. According to him, “we’re on the tipping point of the BIGGEST GOLD LIQUIDATION EVENT IN HISTORY,” that could see the precious metal, currently trading around $1,700 to fall in triple or even double digits.