The Bitcoin Bull Market Bounce Back

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The Bitcoin Bull Market Bounce Back

The Bitcoin Bull – It’s Ba-aaaack…

The Bitcoin bull market of 2020 has been sleeping. The mighty beast set a high earlier this year and the effort wore it out. The high is just shy of $14,000, the move more than six months in the making, so it is no wonder the market needed to rest. Since setting the high six weeks ago the BTC/USD has been trending sideways, edging lower, and testing support while profit-takers reaped gains and speculators drove volatility. I thought the market might have bottomed a week or so ago but I was early, prior lows were retested, and the signal I thought I saw became stronger. The sell off was played out or nearly so, it was time for a rebound.

Well Folks, Here It Is

Over the last week Bitcoin has quietly been moving higher. The moves are not strong, there are no big percentages involved, and yet now the BTC/USD is sitting above the short-term moving average. More interesting is the technical picture, the price patterns and indicators. Indicators like MACD and stochastic are firing bullish crossovers that support the upward movement in prices. The upward movement in prices confirms support at a key level, a level twice tested, where a double bottom is forming. This combination of indicators, the whole picture, is a solid buy signal and points to short and long-term profits.

The near-term outlook is bullish, BTC/USD is moving higher from support with a solid buy signal in the indicators. Bitcoin is a very technical market, it’s just about the only way to value the coin other than the cost of mining. The cost of mining has been rising but it’s still well below $11,000, we can assume price is this high because of market demand and that demand is on the rise. My first target for resistance is $11,625, my next target is at the recent highs, near $14,000.

The move coincides, not coincidentally, with the soft-launch of Bakkt. Bakkt began testing its physically settled Bitcoin futures contracts just over a week ago and that means guaranteed buying equal to the volume of trading on the exchange. I suspect when Bakkt opens its doors to the trading community there will be a surge in Bitcoin volume. Longer term, Bitcoin prices will be supported by the Halvening that is scheduled for next spring. The Halvening will cut the supply of BTC in half and greatly impact the supply/demand dynamic. Litecoin halves in two days (from publication), I expect to see it’s price confirm a reversal and return to uptrend any day now.

Bitcoin’s Latest Dip Below $8K Forms Big CME Gap; Could Price Bounce Back?

Bitcoin’s big dip to below $8,000 has accelerated speculation of an extended move to the downside. But the cryptocurrency is hiding a bullish catalyst under its sleeves.

So it appears, CME futures linked to the bitcoin price have formed a big gap on its daily chart. The missing candle between Friday’s close and Monday’s open has a height of about $875, with its head pointing towards near $9,060. In traditional terms, the gap could prompt Bitcoin to bounce back in the coming session, keeping traders’ bullish bias intact.

BTC/USD Futures gap spotted following the nine-percent price drop | Source: TradingView.com, CME

Analyst perceives trading gaps in the Bitcoin futures market as a leading indicator to predict the next trend. 95 out of 100 times, the bitcoin spot price intends to move in the direction of the gaps of the futures to fill them. That makes them a pretty accurate signal to spot near-term trading opportunities in the bitcoin market.

Troubles for Bitcoin Remain

Bitcoin could plunge further, nevertheless. It is partly due to the worsening global market sentiment led by the oil price war between Russia and Saudi Arabia, as well as economic meltdown led by the rising number of Coronavirus cases outside China, mainly in the US and Italy.

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A supply-driven drop in oil prices would normally be a positive for global growth, cutting costs for businesses and putting more money in consumers’ pockets.

This time, that might not be the case https://t.co/VVmIALqwP7

So it appears, the cryptocurrency’s latest crash below the $8,000 level has matched steps with similar moves in the global stocks. All the three US indexes, for instance, plunged to their bear-market territory after the New York morning bell on Monday. Their move downward sent investors to the safety of low-risk government bonds.

Peter Cecchini, the chief market strategist at Cantor Fitzgerald, called it the end of the 11-year bull market.

Some analysts believe that bitcoin could rise against a financial market collapse, arguing that it is a safe-haven alternative. But its latest move downhill showed that investors are more interested in stockpiling cash or in deleveraging their stock derivative positions.

According to Travis Kling, the founder of the Ikigai Fund, bitcoin can sustain itself as a long-term store of value. The former portfolio manager cited the increasingly radical monetary and fiscal policies that could make fiat money and its derivatives like government bonds weaker alternatives.

“All of that is now likely coming in the near term,” he added. “Bitcoin is a non-sovereign,hard-capped supply, global, immutable, decentralized, digital store of value.”

Technical Outlook

Bitcoin risks a deep correction towards $6,800 if it falls below its long-standing technical support near $7,600.

Bitcoin awaiting pullback from $7.8-7.6K range | Source: TradingView.com, Coinbase

Nevertheless, a bounce-back looks imminent if yields on the 10-year US Treasury keeps dipping – it has already hit record lows on Monday. That would prompt investors to explore more attractive safe-havens, including gold and bitcoin. Overall, the cryptocurrency’s next bounce on hedging sentiment could have it fill the CME gap near $9,060.

*Not* a short-term market call at all – but it’s this dynamic that will eventually set up for a parabolic move in both gold and bitcoin imo. Historically, gold has performed best as real rates (nominal – inflation) fell the most. https://t.co/BIDhuTnq3n

Meanwhile, there is another CME gap at $11,600 waiting to be filled.

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2020 – and has contributed to several cryptocurrency media outlets, including NewsBTC, FxDailyReport, Bitcoinist, and CCN.

BitPay Exec: Bitcoin Will Bounce Back, Not So Sure About ICO Market

An executive at cryptocurrency payment service BitPay has stated that he believes Bitcoin is far from dead. Sonny Singh is much less optimistic about the future of the altcoin and ICO markets, however.

Lots of Potential Catalysts for Another Bull Run for Bitcoin

Every time the cryptocurrency market takes a nosedive, those who do not believe in the financial innovation led by Bitcoin take glee in announcing the death of the space. So far, they have all been wrong. A browse of BitcoinObituaries shows over 300 different instances in which the number one digital asset has seemingly risen from the grave.

There is nothing to suggest that the latest market correction is not more of the same. In fact, the fundamentals of the space have never been better. The chief commercial officer at BitPay, Sonny Singh, told Bloomberg earlier this week that Bitcoin might be down but is certainly not out. After acknowledging that he has no idea if the market has reached a bottom in terms of capitalization, he added:

“Right now you’re hearing a lot of rumours. But next year you’ll see the talk of the big entrants become real.”

Singh went on to cite Goldman Sachs’s pending trading desk, a Bitcoin product from Fidelity, merchant payment processing from Square, and possibly a BlackRock ETF. He is confident that Bitcoin prices will rise once again following some of these potential developments.

However, he is much less sure about the future of the altcoin and ICO market. Although Bitcoin has lost around 60% of its value in 2020, many other digital assets have suffered much more. Ether has crashed down over 85% from its highs. Meanwhile, XRP has sunk by around 92%. Singh commented:

“People have stopped trading ICOs as much as they were. The ICO market is in a lot of trouble and will never get back to where they were eight months ago. At BitPay, we’ve never been more bullish [on bitcoin]. Where the issue is, is the alt-coins.”

Although the bleeding in the altcoin market is clearly worse right now, it seems unlikely that the concept of the ICO is completely done and dusted. It is probable, however, that investors will be much more discerning in the future and not simply throw money at projects offering up the perfect blend of buzzwords.

We are already seeing a move away from the entirely lawless model of ICOs to more regulated offerings. Evidently, companies still like the idea of tokenised investments. However, they are becoming much more aware that these need to be compliant with existing securities legislation. It is quite possible that these security-backed tokens will become the flavour of 2020.

Rick Delafont

Based in Europe, Rick has written about the cryptocurrency industry since 2020. He was first drawn to Bitcoin as a means of payment but quickly became fascinated by its wider potential implications. His interests lie in the.

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