Bitcoin Price Top Forecast: Bitcoin bulls get ready to buy the dip
|- The cryptocurrency market lived through a turbulent week.
- The sell-off allows for "buy-the-dip" strategy.
This week was a bit disappointing for Bitcoin bulls as the first cryptocurrency failed to regain $11,000, slipped below $10,000 and came close to $9,000 handle. A strong sell-off was caused mostly by technical factors and speculative sentiments as no fundamental reasons are readily available to explain the movement. The total market capitalization slipped to $248 billion from the weekly high of $272 billion, while an average daily trading volume settled marginally above $50 billion, which is roughly in line with the recent average. Bitcoin’s market share stayed at 69%, slightly higher from the previous week.
What’s going on in the market
A strong Bitcoin’s recovery on Monday, August 26 amid global anti-risk sentiments prompted speculations about Bitcoin’s safe-haven features. As the US-China trade war escalation triggered a flight to safety and pushed traditionally protective assets higher, Bitcoin’s growth seemed to fit the pattern. However, the sentiments changed radically and Bitcoin resumed the decline despite continued geopolitical tensions.
This prompted Peter Schiff, the Chief Executive Officer of Pacific Capital, to state that Bitcoin had failed the test as a safe-haven asset. He pointed out that all traditional safe-havens like the Japanese yen, Swiss franc, and gold had moved higher, while Bitcoin plunged significantly. Schiff is known as a hardcore gold bull, however, his opinion was shared by Litecoin’s founder Charlie Lee. His position was a surprise to many as he is known as a prominent Bitcoin bull.
Meanwhile, Mike Novogratz, a founder of a merchant bank Galaxy Digital, believes that Bitcoin’s move below $10,000 is not the end of the world. Speaking in the interview with Bloomberg TV, he encouraged investors to avoid the short-sighted approach to the cryptocurrency. He emphasized that the coin’s price is still more than twice higher than at the beginning of the year.
Notably, daily average Bitcoin futures trading hit $370M on CME, which can also be regarded as a long-term bullish signal. Institutional interest towards the cryptocurrency grows steadily, creating a perfect conditions for a stable price increase.
BTC/USD, 1D chart
On a daily chart, BTC/USD is supported by the lower line of a Bollinger Band at $9,300. This area stopped the sell-off on Thursday and created a good foundation for the recovery. The critical resistance awaits us at psychological $10,000 with SMA100 (Simple Moving Average) 1-day located right above this handle. We will need to see a sustainable move above this handle for the upside to gain traction with the next focus on $10,350-$10.450 area. A confluence of SMA50 and the middle line of a Bollinger Band on a daily chart located in the above-said zone may slow down the upside move.
From the longer-term perspective, $11,000 remains the key barrier. Once it is out of the way, the technical picture will improve significantly. This development will bring the bullish trend back on track.
On the downside, a resumed sell-off may take the price below $9,300. Once this happens, critical $9,000 will get back into focus. This support area is strengthened by the middle line of the 1-week Bollinger Band. It should attract new buyers to the market; however, if it is broken, the downside is likely to gain traction with the next focus on $8,000 and, potentially, $7,500 (SMA100 weekly chart).
Considering the downward-looking Relative Strength Index (RSI) on a weekly chart, the further decline towards the said support levels looks highly likely at this stage. However, the technical picture on the shorter timeframes does not confirm the imminent sell-off and creates a condition for buy-the-dip strategy
The Forecast Poll of experts worsened since the previous week. Expectations on weekly and monthly timeframes are bearish, while the longer-term forecast remains bullish. an average price forecasts are well below $11,000.
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