Published: February 10th, 2020
– For the past couple of weeks, the world’s first cryptocurrency has been doing amazingly well, staying steadily above the highs of $9,725. After a brief stint in the weekly lows of $9,200, it got to around the $9,800 and since Sunday morning, broke the $10,000 mark. Could a slide back to $9,600 still be possible? Whatever happens after this week notwithstanding, this current ascension tells of the trend that will define how Bitcoin trades in the coming weeks.
If the current Bitcoin trends continue then February 4, could be the last moment in a long time that the cryptocurrency shifted from a sideways price movement to rally past the highs it set in 2019. Before the sudden rise, the coin was trading at $9,080, the lowest recorded price in February. Since then, it has pushed past its established band of resistance between $9,600 and $9,800 and finally broke the $10,000 on Sunday, February 9 in the morning.
To understand, or rather, do an accurate prediction of what may become of the Bitcoin price in the coming days, it is prudent to analyze the possible scenarios that would have played out before the breach.
Before the weekend, pundits were envisioning two scenarios; a rejection or a breach. A breach of the resistance band, which is what happened in this situation, implied that many bulls acted in unison. For the price to keep ascending, however, the bulls must maintain their momentum.
The second scenario; the rejection, which did not happen, would have implied that the price of Bitcoin falls below the $9,600 level. A price pullback would have meant that coin establish a momentary two-week high of $9,765.
Going over the $10,000 mark and forming a resistance band around this magical figure indicates that the currency’s bullish phase is back. The recovery has affirmed the belief by a cross-section of the cryptocurrency community that the onset of the marvelous performance expected in 2020 may have just begun.
Tom Lee, the head of research and managing partner at Fundstrat Global Advisors says that Bitcoin is abiding by its historical script. He added that the coin has in the past rallied at about 197% whenever a break above the 200-day simple moving average (SMA) is manifested.
On Wednesday, the cryptocurrency broke two key barriers; $9,600 and $9,700. The surge brought the price to as high as $9.765, which the coin attained back last November. However, it was not until Saturday that it tested the $9,800 hurdle, and by this moment, the bullish momentum had started swelling.
Bitcoin is now swaying at the $9,800 to $10,100, the latter price being a five-month high. The last time the Bitcoin/USD exchange rate was in this region was back on September 22, 2019. After this climb, it dropped to the lows of $6,500. The price flux aside, a lot can be said about the price of Bitcoin from now henceforth. Just slightly over 40 days into the year, the world’s first cryptocurrency has gained more than $2,500 moving from just over $7,500 to its current exchange rate.
It easily is the best performing coin, and its behavior is convincing many market analysts to stand in favor of bullish sentiments for the cryptocurrency markets. Pundits think that a run may come even before the much-anticipated Bitcoin halving which is expected to happen sometime in May 2020.
The market looks at the $10,000 as a psychological turning point. So far, the cryptocurrency has been to this point only a few times, the first being some 800 days or so on November 29, 2017. What followed was a rise to the coin’s record high, then a slump back to the $3,300 range.
Now that the price has gotten to the magical point once more, what can cryptocurrency enthusiasts expect?
The price action of Bitcoin has exceeded the expectations of many market observers. This is especially so because just a few days ago, it was trading sideways without prospects of breaking past the $9,100 and $9,200 resistance band. It not only climbed to $10,000 but also managed to form a new high at $10,193 for 2020. Remaining in this region is, however, unrealistic without enough bull power to take it forward. Right now, there is not much evidence of such a bull run.
Over history, the price of Bitcoin has been trading to a new high then pulling back down before breaking out to establish another high. If the price of the cryptocurrency assumes this pattern, then the market is likely to witness a rejection back to the $9,600 resistance zone.
At the time of penning this piece, the coin is trading at $9,978 on Coinbase (February 10, 08:04 UTC) and receding. Though the price is still bullish, signs that the bulls are losing control is beginning to manifest. The price, as such, can only hold or climb if the bulls remain firmly in control. Otherwise, a price pullback seems to be the logical destination as the week wears out.
A price pullback may, however, be followed by another ascension. With the next Bitcoin halving event just about 75 days away, the markets may experience a digital scarcity of the coin. Such a situation will most likely rev up demand.
The Price of Bitcoin is shattering momentary records as May 2020 gets closer. Getting to the $10,000-mark was monumental. It may not maintain this value but it has established a yearly high going deeper into the year. With the Bitcoin halving event only about 75 days away, it will be interesting to see the price fluxes that come as a result. Right now, the price predictions can spread all over the place. However, cryptocurrency enthusiasts are watching to see if the cryptocurrency will hit the $12,500 mark before the halving, which many believe is the level of interest that Bitcoin must attain if it is to soar again.