What’s Next For BTC?

Must read

In seconds, the Bitcoin price has surged from $6,190 to $6,450, by more than 4 percent, after the dominant cryptocurrency remained in the low $6,100 region for more than 24 hours.

The sudden increase in the price of Bitcoin on September 9 was not expected by the majority of analysts and investors in the cryptocurrency market, primarily due to the sheer magnitude of its drop on September 5

On August 25, on CNBC Crypto Trader, Voorhees said:

“I don’t expect it (bear market) to end soon, although I do think that the rate of collapse has slowed considerably. Generally in these bubbles, after you go through several months of a downtrend you hang out in a range for a while… But I think we are done with a majority of the collapse.”

Investors in the cryptocurrency market, especially those that have allocated a significant portion of their holdings into the market, need to consider the fact that cryptocurrencies as an asset class is still at its infancy.

There exists a limited range of institutional products, publicly tradable instruments, and a lack of liquidity that leaves the market generally vulnerable to extreme daily volatility and manipulation.

Over the past seven months, Bitcoin has shown high volatility in the $6,000 to $10,000 region. In April, June, and August, Bitcoin tanked to $6,000 and recovered to resistance levels found at $10,000, $8,000 and $7,000.

Today, on September 9, the price of Bitcoin surged 4 percent from $6,190 to $6,450 within 30 seconds. The dominant cryptocurrency in the global market is vulnerable to major fluctuations and as such, investors should expect 5 to 20 percent drops or surges in value on a daily basis.

The commentary of Voorhees on the bear market of 2018 is important to acknowledge because it is evident that the cryptocurrency market is still on a clear downtrend. But, given the unpredictability of cryptocurrencies, it is difficult to spot the exact bottom.

A viable opportunity for new investors to come into the market would be in the stabilization and bottoming out process, during which BTC shows high stability in the low $5,000 to $6,000 region.

BTC has not fully recovered from the $6,000 support level which it tested three times in the past six months. A proper recovery from the $6,000 region would lead to the initiation of a mid-term rally.

But, the gap between $6,000 and the monthly peak has decreased every time a correction has occurred since February, suggesting that Bitcoin is gradually bottoming out in the $6,000 region.

The abrupt corrective rally of BTC triggered by a strong oversold condition demonstrated in the low $6,100 range could enable Bitcoin to find stability in mid-$6,000, which would be benficial for the short-term recovery of the market from a major drop on September 5.

Latest article