The bitcoin price has failed to secure momentum above the $7,700 mark, struggling to break above the one-month descending trendline since May 3. If the upward movement of bitcoin fades and the dominant cryptocurrency is unable to bounce back quickly to the higher end of…
The bitcoin price has failed to secure momentum above the $7,700 mark, struggling to break above the one-month descending trendline since May 3. If the upward movement of bitcoin fades and the dominant cryptocurrency is unable to bounce back quickly to the higher end of $7,700, a bleed out to the $6,000 region can be expected.
The corrective rally from $7,040 to $7,700 sparked significant optimism, especially amongst short-term bulls that have predicted the price of bitcoin would rebound back to the $10,000 region within June. While the $10,000 June target is still in play, another correction in the upcoming days will likely occur, given that the corrective rally from $7,040 has stopped at $7,700 and BTC has declined to $7,600.
A short-term break out to the $8,000 region supported by the corrective rally from $7,040 was conditional, as it required the volume of BTC to spike and the cryptocurrency to sustain momentum at its weekly peak, in the $7,700 region.
However, due to its low trading volume, BTC has failed to test a major short-term support level at $8,000 and fell to $7,600. A drop to $7,500 could result in BTC experiencing yet another minor correction, potentially to the higher end of $6,000.
While the Relative Strength Index (RSI) of BTC is 43.3, it is not demonstrating an oversold condition for BTC. A further drop in BTC would not lead the RSI to drop by large margins and thus, a short-term turn around back to the $7,700 mark if BTC falls to $7,500 is unlikely.
The daily candle on June 4 was supposed to be the big short-term break for BTC, rising above the one-month descending trendline from May 6 and effectively establishing a bottom at $7,040. But, the recent decline in the price of BTC will likely send BTC back to the lower end of $7,000 or in worst case scenario, to the $6,000 region.
Despite the negative price trend of BTC, most multi-billion dollar hedge funds are still extremely optimistic in BTC and the entire cryptocurrency market.
The expected decline in the price of BTC is a 5 to 10 percent drop maximum, which could extend to 15 percent at its worst. But, as Pantera Capital CEO Dan Morehead stated, which oversees more than a billion dollars in cryptocurrencies and digital assets, hedge funds look at the 5 to 10-year trend of the market.
In the mid to long-term, Morehead stated that bitcoin is still a screaming buy, adding:
“As digital tokens continue to multiply and gain wider use, the $400 billion crypto market could balloon to $4 trillion, and even $40 trillion is definitely possible. It’s the 10-year forecast.”
If BTC recovers gradually from the $6,000 to $7,000 region and establish major support levels with strong and volume in the upcoming months, the $20,000 to $50,000 BTC targets of large-scale investors can still be in play.
Often, tokens enjoy a surge in volume and price when the price of BTC is increasing gradually and volume of the cryptocurrency market picks up. If BTC enters the $7,500 region, it is likely that tokens will experience a substantial drop in value, once again.
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Last modified: January 24, 2020 11:07 PM UTC