Bitcoin price analysis, long-term trend and the top crypto news
Bitcoin stuck in a rut... posting low volume and low volatility for the past month. But its fundamentals have never been stronger. Despite hovering between $9,000 and $12,000 for the past three months, and seeing volume fall from a high of $46 billion to just around $11 billion, there’s reason to believe investors are just waiting for the launch of Bakkt’s Bitcoin futures.
What’s next for Bitcoin? In the short-term, it looks like it’ll be consolidating a little longer and staying between $10,000 and $11,000. That’s going to remain the case at least until the fourth quarter, where it’s extremely likely that trading will pick up once more based on historic trends.
What could break it out of the rut? Major news, basically. Bakkt’s upcoming futures could do it, or more news of Chinese buying into Bitcoin. Though in the latter case it seems they, like many investors, are waiting for a clear bull market to start trading.
Any risk of a further drop? The $9,000 support hasn’t been breached since the start of the summer, but there are some reasons to think that it may fall back to as low as $6,500 before resuming growth,
Wut We Think: It’s a good bet to think that the price will not move significantly until Bakkt’s futures launch, which could serve as a signal for Bitcoin to break out past the $11,000 resistance. If that doesn’t happen, investors may lose heart and push Bitcoin back into a bear market - however, even a bear market will probably not hold long as we approach the Bitcoin halving.
Bitcoin’s Narrowing Trading Range Seen Suggesting a Push Higher
Bitcoin might be trading narrowly now... but there are signals that it may soon break out. And that’s down to the 50-day moving average, which was breached for the first time since August. That, along with increasing institutional interest, could be exactly what Bitcoin needs to get the 2019 bull cycle back on track.
What does the moving average mean? Historically, a break above the 50-day MA has served as a bullish signal. That doesn’t mean that a spike is guaranteed, but Bitcoin is approaching a decision point.
What decision? Time will tell, but the narrowing range and tightening Bollinger Bands within the wedge all make it clear that the current consolidation won’t hold. Curiously, the tip of this pennant is located at about Sept 23rd - coincidentally the same day of Bakkt’s launch.
So it’s a waiting game? It seems so. The largest wedge goes out to Nov. 11th, and if Bakkt’s bullish sentiments don’t pay off, then we may see a drop to as low as $7,500 before the bulls kick in again.
Wut We Think: Even though the current price action is limited to a few hundred dollars, that still means a pretty penny for intraday traders, and those that bought in around $9,000 are sitting tight. But regardless, patience is key here, at least until the decision point around Sept 23rd is reached.
Bitcoin Will Become a Safe Haven Long Term
With all the tension in global trade, Bitcoin is increasingly being touted as a safe haven... even if it isn’t quite there yet. But it absolutely has the potential in the long run, according to Blockchain Capital partner Spenser Bogart.
Why is Bitcoin being considered for a safe haven? A big reason is Bitcoin’s comparison to gold, in that both assets are rare, deflationary, and resource-limited.
But it’s not a safe haven yet? Quite frankly, the volatility is still too high. Even with the recent consolidation, Bitcoin still posts intraday changes of up to 10%, compared to gold which has an average intraday volatility of 1-2%.
Is volatility the only reason? It is a big one. Bitcoin seems pretty decoupled from external shocks. Trust is another - while Bitcoin, by design, is trust-less, hacks of exchanges and wallets are common enough that Bitcoin custody and storage are big topics. Efforts like Bitcoin warehousing by Bakkt or ETF-like funds by VanEck could help alleviate that issue.
Wut We Think: Bitcoin may be a little over a decade old, but it’s still growing, progressing, and developing. While it may never be used as a currency, there’s good reason to believe that down the road, as Bitcoin mining slows and rewards drop off, volatility will move low enough for it to be considered a true save haven.