Analysts Expect Bullish Continuation as Bitcoin Price Flirts WIth $10,000
Bitcoin (BTC) has just seen its craziest three-day period in literal years. For those who missed the memo, Friday saw the cryptocurrency market catch traders with their pants down, pushing digital assets sky-high in a matter of hours.
At its peak on Saturday morning, Bitcoin had rallied 42% on the day, moving from $7,300 to just shy of $10,500. This gargantuan move — the fourth-largest in Bitcoin’s entire history and the largest daily rally since 2011 — liquidated over $400 million worth of BitMEX short positions.
While the bullish momentum has slowed for now, with Bitcoin returning to $9,700 and starting to trade in a range, analysts are expecting for cryptocurrencies to continue higher into the coming days. Here’s why.
Bitcoin’s Bull Case Builds
An analyst going by “JB” pointed out that with this latest move from $7,700 to $9,700, Bitcoin’s three-day chart is looking extremely bullish.
He drew attention to the following reasons to back his prediction: the recent candle can be defined as a “bullish engulfing candle,” a descending trend line that originated at June’s $14,000 top was broken, markets have seen their biggest volume day in months, the MACD is printing a bullish divergence, and the Willy indicator is now leaving oversold territory.
Also, a trader going by “Smokey” has noted that the Ichimoku Cloud is printing a swath of buying signals: a breakout past the Kumo, a trendline, and an impending bullish twist of the Cloud. He thus confirmed that “this is either the biggest bull trap ever,” a scenario which he said is highly unlikely, or “we’re in for a nice Q4 2019/Q1 2020 on BTC.”
It isn’t only technical signs that show Bitcoin is gaining bullish momentum.
On the fundamental side of the market, Bakkt’s Bitcoin futures have set a new daily volume record of 1183 contracts, which equated to around $10.3 million worth of trading. These relatively high volumes are not yet a trend, yet may show increasing institutional interest in cryptocurrency. To add to this, China’s leader, President Xi Jinping, endorsed blockchain in a political context, which many say cements the idea that cryptocurrencies and related technology have a key role in the world of the future.
In terms of on-chain metrics, ByteTree’s Charlie Morris noted that as of October 26th, Bitcoin fees paid by users increased by 43 percent, the value of cryptocurrency sent surged by 66 percent, and network velocity hit 747 percent.
Bitcoin last 24 hours. Fees up 43%. Spend (tx $ value) up 66%. Velocity 746%! Keep that up and the bear will be put to rest. pic.twitter.com/bLPJijrC1Z
— Charlie Morris (@AtlasPulse) October 26, 2019
HODLers Unfazed
Bitcoin HODLers seem to have picked up on the bullish sentiment. According to a recent tweet from Rafael Schultze-Kraft of cryptocurrency analytics platform Glassnode, “HODLers keep on HODLing.”
He remarked that on average, “only 1.7% of spent outputs (essentially coins sent) this month were older than six months.” To put it in other words, 98.3% of all “on-chain activity [this month] was due to UTXOs created within the last half-year.”
Despite the crazy price action this week, hodlers keep on hodling.
On average, only 1.7% of spent outputs this month were older than 6 months.
That is, 98.3% of all on–chain activity was due to UTXOs created within the last half year.
Data: https://t.co/jlwo4vqmvL pic.twitter.com/b2SN8UHfMR
— Rafael Schultze-Kraft (@n3ocortex) October 27, 2019
Any Bearish Arguments?
Although sentiment is wildly bullish across the cryptocurrency market — as evidenced by HODLers clutching tight to their coins — there is some evidence to suggest some short-term pain is in the works.
The CME’s BTC futures just printed a massive $1,000 gap between Friday’s close of $8,700 and the weekly open of $9,700. This might not mean anything on its own. But, Bitcoin has had a history of filling the gap, moving down or up to prices where the CME’s market didn’t trade at. Just look to the below chart from Richard Heart, which shows that nearly every single daily CME gap has been filled by BTC in the weeks that followed a gap’s creation.
Here's a History with all the gaps circled in CME #Bitcoin futures since they started the day of $20k #BTC All Time High.
They've all filled except 1 below us at $8500, and one we just made above us 7 days ago at $11,195. pic.twitter.com/J7mVffmaLX— Richard Heart (@RichardHeartWin) July 19, 2019
Also, Bitcoin’s four-hour chart has begun to print an array of bearish divergences, technical signals that precede slight corrections. Of course, there is no guarantee that these divergences will play out, but a short-term drop is surely on the table.
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OhNoCryptocurrency via https://ift.tt/2PblI7a @Nick Chong, @Khareem Sudlow
