The price of bitcoin has corrected by up to 18 percent upon hitting its 17-month high towards $13,868.
Following the European market open on Thursday, bitcoin plunged to an intraday low of $11,301 on San Francisco-based exchange Coinbase. The move brought the cryptocurrency’s 24-hour losses to around 8 percent but managed to maintain the monthly bullish bias with 37 percent gains.
Exchanges trading the bitcoin-enabled pairs collectively posted more than $44 billion in volume in the past 24 hours. At the same time, “Real 10”, which filters out of 95 percent of the artificial daily volume, reported approx $6.03 billion worth of trading activities.
Many macroeconomic catalysts are creating a bullish vacuum for the bitcoin market as of late. First, the Federal Reserve’s decision to cut interest rate is weakening the US dollar sentiment against the rival assets, including both commodities and currencies. Second, an economic crisis is arising due to the ongoing trading struggle between the United States and China, sending regional investors looking for haven assets like gold, and even bitcoin.
And third, the imminent launch of Facebook’s cryptocurrency Libra is reportedly reinflating the bitcoin buying sentiment. Ever since the social media giant’s announcement, the price of bitcoin has surged by more than $2,500.
The latest pullback has already brought the price inside our wedge breakout target range of $11,609-$11,779, as discussed in this analysis. The list of strong fundamentals — as mentioned above — could allow bitcoin to continue its parabolic run above the said range. The Coinbase weekly chart shows that the price is now looking to reclaim $13,500 of the 61.8 percent Fibonacci retracement level as its next upside target.
As of now, the already-overbought bitcoin market could either correct by 30 to 40 percent (given how in 2017, bitcoin’s ascent to $20,000 met with multiple downside corrections), or continue its parabolic run towards the medium-term pullback target of $16,000, now coinciding with the 78.6 percent Fibonacci level.
That said, the market could see a handful of profit taking actions as retail/institutional investors meet their target range and exit. Or, given the fundamentals, which also includes the next year’s bitcoin halving event, they could either hold the cryptocurrency or purchase it at new higher high formations.
“Bitcoin can easily hit $20k new all-time highs this month because the order book on BTC is thin,” said Josh Rager, a prominent market analyst. “With only 17M+ in circulating supply and millions already lost we could be looking at only 13M-14M available to trade. Many of these are held by hodlers not willing to sell now.”
Disclaimer: Opinions presented in the article above are of the author and author’s only. CCN holds no responsibility for the inaccuracies (if any) in the material presented above.
Click here for a real-time bitcoin price chart.