Bitcoin Forecast: Correction continues amid ETF speculation, momentum remains positive
- The BTC/USD extended its correction and shed the $8,000 level.
- The technical picture remains optimistic, and the current slide is still in correction territory.
- The FX Poll shows a bearish bias in the short term but a bullish one in the medium and long-term.
The price of Bitcoin suffered a decline as July ended and August began. The move that was initially only an exit from oversold territory extended into a full-scale correction. The primary topic that buzzes through the crypto-sphere remains the prospects of an approval or a rejection of an Exchange Traded Fund (ETF).
One of the SEC's four commissioners, Heston Peirce, said there is "no reason" why they would not allow the product. However, the rejection of the request from the Winklevoss brothers causes some caution. The founder of Ethereum, Vitalik Buterin, called on markets to focus on the usability of the coins rather than an ETF. It seems that his calls fall on deaf ears as Bitcoin is crushing the competition. The market capitalization of Bitcoin is close to 50% once again.
An ETF would make speculating on Bitcoin prices far more comfortable than it is today and speculation about that potential speculation supports the price of the BTC/USD. Price action is much healthier in the granddaddy of digital coins.
And it is not only price action. There are five reasons for Bitcoin's summer surge.
As usual, some mainstream banks came out to bash Bitcoin. UBS, a Swiss bank, said that Bitcoin is too unstable to become a mainstream asset. It is important to note that in Zug, Switzerland, there is a lot of crypto innovation.
What's next for Bitcoin?
BTC/USD Technical Analysis - Higher lows sustain the bullish trend
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The Relative Strength Index (RSI) on Bitcoin's daily chart shows that after exiting the overbought territory, it remains around 50, balanced. The Simple Moving Averages are also balanced with the cryptocurrency trading above the 50-day SMA but below the 200-day one, which seems to accompany the price.
However, Momentum remains positive and healthy. Also, the BTC/USD enjoys higher highs and higher lows. The recent slide is far from being a dangerous one.
$7,800 worked as a support line when Bitcoin traded on high ground in late July. It also capped it back in early June. Higher, $8,488 is the three-month high seen in late July. Higher above, $8,850 worked as resistance in early May, and the $10,000 level looms high above.
On the downside, the round level of $7,200 remains support after working as such in mid-July. $6,800 is the next level to watch after it limited the coin's gains in both June and July. Much lower, $6,070 was the low point in mid-July.
The Forecast Poll of experts shows a bearish bias and a downgrade of expectations for the short term. However,.the views have been upgraded for the medium term. Both the medium term and the long-term now see a bullish bias.
More: Overcoming $7,567 is key to a meaningful recovery – Confluence Detector
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
