Throughout the past week, the bitcoin price has increased from $3,901 to $4,048, by nearly 4 percent against the U.S. dollar.
The relatively strong short-term performance of bitcoin led alternative cryptocurrencies to engage in large upside price movements, allowing the valuation of the crypto market to rise by about $7 billion.
However, while traders, technical analysts, and strategists generally remain positive on the mid-term price trend of bitcoin, some traders foresee the dominant cryptocurrency retesting key support levels in the mid-$3,000 region.
Will Bitcoin Drop Back to $3,000 or Was it the Bottom?
Since December 2018, bitcoin tested the $4,200 resistance level twice and cleanly broke out of the $4,000 mark on three occasions.
Following the two attempts to reach $4,200, the bitcoin price pulled back to the $3,700 to $3,900 range, unable to sustain momentum possibly due to a lack of capital inflow and volume in the cryptocurrency exchange market.
As such, some traders believe that if bitcoin is not able to demonstrate a promising rally above the $4,200 to $4,600 range in the near-term, there exists a high probability that the asset drops back to its support levels at $3,500 and above.
Mayne, a recognized cryptocurrency trader, said:
“If the bulls don’t step in soon here I’m gonna have to short $BTC earlier than expected. I don’t suspect the yearly open holds this time either.”
Give the inability of bitcoin to surpass $4,200, one trader boldly predicted that the asset could establish a new 12-month low below the $3,122 mark, possibly at $2,000.
“Selling BTC in the $4,000 region and up if need be. Trade duration: weeks to months. Target: $2.000. Noobs buy at $4,000 so they can panic dump their bags at $3,000. The market is a device for transferring money from the impatient to the patient. Always has been and always will be,” the trader said.
Whether bitcoin moves to the upside or breaks down to the low $3,000 region, traders see a high level of volatility incoming due to the noticeable increase in the volume of the cryptocurrency exchange market.
Depending on the price trend of bitcoin in the upcoming few days, several traders have said that bitcoin could either continue to gradually climb to the $5,000 region or retest recent lows.
“Volume MA (on bottom) is at historic bounce levels on the 1W. Volatility incoming. Confident in continuation to the upside, although positioned to be fine in event of price dump. Always prepare for best and worst case. One bear thought I have, is a lack of sell climax thus far,” an analyst known as Crypto Thies wrote.
But, some analysts also foresee bitcoin testing the last phase of the 15-month bear market and found striking similarities between the price trend of bitcoin in 2015 and 2019.
The Cryptocurrency Industry is Continuing to Expand
Although many traders remain cautiously optimistic in the price trend of major crypto assets including bitcoin, the cryptocurrency industry is demonstrating signs of growth and expansion.
On Wednesday, Binance, the world’s largest cryptocurrency exchange by daily trading volume, enabled users in Australia to purchase bitcoin at more than 1,300 physical storefronts, an initiative that could increase the accessibility of cryptocurrencies to a fast-growing blockchain market.
Last modified: March 4, 2021 3:20 PM