While some analysts have suggested that the sell-off of bitcoin from the operators of a scam in China may have fueled the pullback of bitcoin throughout the past week, technical analysts consider the move to be triggered by the rejection of key support levels.
Earlier this month, a report from the securities division of Goldman Sachs indicated that $11,880 acted as a strong level of support for bitcoin.
One Goldman Sachs analyst indicated that depending on how the $11,800 level reacts to the downside movement of the dominant cryptocurrency, it could test $13,971 as a potential short-term target or $8,999 as a low support.
“That being said, in the bigger scheme of things, this might still be the leg of another 5-wave count similar to the trend that lasted from December 2018 through June 2019. Said another way, any such retracement from $12,916-$13,971 should be viewed as an opportunity to buy on weakness as long as it doesn’t retrace further than the $9,084 low,” read the report.
In the past several hours, the bitcoin price has dipped to $9,600 with low resistance at the $9,100 to $9,300 range. Based on the abovementioned report, there exists a strong possibility that bitcoin sees a relatively hard rebound in the low $9,000 region.
In the long-term, as reported by CCN, high profile investors remain optimistic in the growth trend of bitcoin. Murad Mahmudov, the CIO of Adaptive Capital and former Goldman Sachs trader said that he foresees the bitcoin price rising to as high as $100,000 in the next bull market.
As the Dow Jones plunged by more than three percent in a single session on August 14, the price of traditional safe haven assets like gold increased against the U.S. dollar.
Although bitcoin is considered an alternative store of value, it is still yet to demonstrate any clear correlation with the performance of the U.S equities market and the global financial market.
In late 2018, venture capital investors like Chris Burniske theorized that the bitcoin price may have had dropped by more than 50 percent against the U.S. dollar following a sell-off in the U.S. stock market as investors rushed to close liquid holdings of alternative assets.