The price of bitcoin has been see-sawing since hitting the $13,000-mark in late June as traders believe that the cryptocurrency could witness a significant pullback in the 30 percent to 40 percent range. But one analyst believes that it would be a good idea to buy bitcoin futures if the crypto asset witnesses such a major pullback.
John Kolovos, chief technical strategist at New York-based Macro Risk Advisors, told Bloomberg in an interview that bitcoin is currently undergoing a correction, but not a trend reversal. He said:
“My sense is start looking for stabilization for bitcoin between $9,000-$8,500, closer to probably $8,500, for a resumption in uptrend probably back to the old highs. I would stop myself at out around $8,000.”
But the good news for bitcoin bulls is that Kolovos didn’t stop there. He went on to say that bitcoin is headed higher in the long run and could reclaim its old highs of around $20,000. This is why Kolovos advises bitcoin investors to buy the pullbacks in the price of the cryptocurrency, especially at the $8,500 mark because that’s where he expects it to stabilize.
The bitcoin price has been caught up in a stalemate as the bulls and bears seem to be confused where the cryptocurrency could be heading in light President Trump’s comments. But investors should not forget that the price of the crypto asset was been prone to wild swings in the past.
Crypto trader Josh Rager points out that the price of bitcoin surges more than 153 percent after facing a 30 percent-plus pullback.
Assuming that $13,000 was the highest point before the current pullback arrived, the price of bitcoin could fall to $9,100 before it starts rallying again. Bitcoin hasn’t tested that mark just yet, so Kolovos’ thinking that the cryptocurrency will fall once again before stabilizing might be true.
And if bitcoin actually falls to as low as $8,000 as Kolovos sees in the worst-case scenario, a 150 percent plus rally will put the price of the cryptocurrency at $20,000.
But don’t be surprised to see the digital currency break beyond those levels. That’s because Rager suggests that each bitcoin bull cycle is longer than the previous one.
If that holds true, the case for hitting $20,000 and beyond is still in play. What’s more, Kolovos and Rager are not the only technical experts calling for bitcoin to hit fresh highs.
Investment bank Canaccord Genuity predicts that the digital currency will hit $20,000 by March 2021 thanks to an increase in the number and volume of transactions. However, a closer look at what Canaccord analysts said in the research note while issuing their price target clearly indicates that even they were anticipating a pullback.
“Bitcoin has started to form the spring 2019 bottom we began mentioning last year, although a close look at the chart suggests the recovery may be slightly ahead of itself. Looking ahead, if bitcoin were to continue following the same trend, the implication is a slow climb back toward its all-time high of ~$20,000, theoretically reaching that level in March 2021.”
So with a $20,000 bitcoin price still in play, the best you can do is keep stacking the crypto asset on pullbacks as it could be headed higher in the future.
Click here for a real-time bitcoin price chart.
Last modified: January 10, 2020 2:17 PM UTC