Bitcoin Analyst Foresees Bearish Correction as Cost Struggles Near $18.5K
Bitcoin rallied relentlessly for six weeks in a row, rising by nearly 78 percent as traders assessed the growing institutional investments to the cryptocurrency space.
Pantera Capital, an asset management company in California, claimed that payment service giants PayPal and CashApp bought more than 100 percent of their existing Bitcoin mining supply, causing a supply deficit in both institutional and retail markets.
The strong institutional backing for Bitcoin somewhat offset its technical risks. It allowed greater traders/investors to hold the cryptocurrency than to sell it in its regional highs, according to numerous sources that demonstrated an increase in the so-called HODLING opinion and a jump in the Bitcoin withdrawals from leading exchanges.
Released at Mon, 23 Nov 2020 08:15:35 +0000
Bitcoin bulls reject two sell-off attempts to maintain a general upside bias.
On the other hand, top strategists from ARK Invests, JPMorgan, and Blackrock made a bullish case for the cryptocurrency, mentioning its anti-inflation features against the oversupplied US dollar, in addition to its ability to conquer gold at the long term to become the go-to asset in times of crisis.
It represented bulls’ rejection to volatile downside attempts — a validation that buyers are safeguarding the $17,500-area against aggressive bearish assaults.
But to Marc Principato, Bitcoin has not brushed aside its bearish risks. The Green Bridge Investing’s Executive Director considered the possibilities of more downside correction attempts as short term participants continue to observe $18,500 as a point of infection from the running uptrend.
“[Bitcoin] is so much for operational than passing a bar of gold around,” BlackRock’s chief investment officer of fixed income Rick Rieder told CNBC on Friday last week.
But Mr. Principato refrained from indicating accumulation in the range between $17,000-$18,500. The analyst said he is waiting for Bitcoin to experience another bearish correction, but to under the 17,000-support. A”proportional support,” he added, is at $16,000 or at the upper range of $14,000.
Bitcoin to $14K
Nevertheless, traders should wait for a bullish confirmation even if Bitcoin strikes the 14,000-16,000 range, Mr. Principato warned, adding that the area only allows analysts to measure risks for their upcoming trading strategies.
“Today’s move from the 18,770 high into the 17,600 low demonstrates how FAST selling action can assert itself,” Mr. Principato wrote in a late-night Sunday note. “Even though today’s candle establishes a bullish pin bar, the risk at these levels for a SWING TRADE remains unreasonably high.”
A surprise sell-off from the Bitcoin market on Sunday that crashed the price to $17,610 met with an equally strong purchasing wall. The cryptocurrency recover later, jumping above $18,500, a level it held as service before the weekend plunge.