Bitcoin Price Poised to Press $8,000, Analysts Assert After 4% Drop
At long last, Bitcoin (BTC) has started to show signs of life. Over the past 48 hours, the cryptocurrency has pressed higher, moving past the tight range in the $7,100s it was stuck in for days.
Related Reading: CME Futures Data: Institutions Still Wary Despite Bitcoin’s Bullish Signs
By Monday morning, the cryptocurrency was trading as high as $7,700, seemingly forced higher by shorts covering their positions and buyers expecting further upside. Though, all of a sudden, Bitcoin collapsed, tanking by 4% in an hour or two as the asset failed to surmount the resistance in the high-$7,000s.
While some fear that this is a sign of a reversal to the bear trend that brought BTC under $7,000, analysts have affirmed their opinion that surmounting $8,000 remains in the works for Bitcoin.
Bitcoin Bulls Expect Upside
Analyst Crypto Buzz recently noted that despite the drop that just took place, BTC’s outlook is looking decisively bullish, with a divergence forming between the Relative Strength Index (RSI) and the price, implying that continuation to tap $8,000 is possible in the coming days. That’s not to mention that the cryptocurrency remains above two key levels: the horizontal resistance around $7,200 and the moving average depicted in red below.
Thank me later!!! pic.twitter.com/WEQwX3ZC7s
— CryptoBuzz
(@Crypto_Buzz_247) December 23, 2019
Related Reading: What’s Next for the Bitcoin Blockchain? Top Developer Weighs In
Bearish Factors Remain Potent
Although the outlook for Bitcoin is starting to look better after weeks of bearish action, there remain a few headwinds that may haunt the cryptocurrency market in the coming weeks.
This week, the CME monthly Bitcoin futures contracts are set to expire.
In a recent Twitter thread, a market commentator going by “Joel” mentioned this, showing that there is a seeming correlation between the expiry of CME monthly futures contracts for Bitcoin and price action.
1/2$BTC
Updated CME dataKeys:
-70% of weeks leading up to the CME close are negatives
-70% of days before the close are negatives
-65% of closing days are positives
-Neg day before = 81% Pos closing day
-Above average volatility leading up to and during the closing day pic.twitter.com/z0wcYiuEmC— Joel (@JofDom) December 22, 2019
His data shows that in the week ahead of all previous CME futures expiries, there was a 70% chance that Bitcoin trended lower, with the average loss coming out to 2% in seven days. This implies that BTC could easily drop again as the December 27 expiry nears; then again, though, the 2% loss is just an average, meaning that the CME expiry could spell doom for Bitcoin in the coming week.
There’s also a sentiment from analysts that the PlusToken scam selling Bitcoin and Ethereum could continue to act as a bearish factor for the coming months, for the operators still have coins to sell.
Relate Reading: XRP is Down 95% from Its 2018 Peak; What’s Next for the Embattled Crypto?
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Nick Chong, Khareem Sudlow