Bitcoin bounces above $7,000 but the bearish pressure pushes back. A sideways range below $8,000 is now very likely before the next breakdown.
The cryptocurrency market has had a decent rejection at $6,500. After last week sell-offs led to new lows, we definitely expected a reaction from the bulls. Whether it will be enough remains to be seen. Meanwhile, the market has shed over $50 billion in a very bearish November. As the month rounds up, it’s clear cryptos will end bearish unless an unexpected huge surge happens.
Bitcoin bounces above $7,000
Bitcoin hit a fresh bottom ($6,500) in the second half of 2019 to mark its lowest since May 2019. With the recent drop, Bitcoin’s 2019 net profit has dropped from around 250% to 85%. However, it still remains the highest gainer among the top guns in 2019 YTD. With 66% dominance, it’s the biggest by far. The price quickly surged this week and gained $700 to reach above $7,000
Analyst: Bitcoin will hit $100,000 by 2021
Despite the discouraging bearish market, many Bitcoin bulls remain optimistic that the bearish trend will fizzle out. It’s a matter of when. One of these bulls is Anthony Pompliano who recently suggested that BTC price will increase massively. He predicted that by 2021, the price of the premier cryptocurrency will hit $100,000. He, however, highlighted the unpredictability and the high risk attached. Of course, with such a huge potential reward comes a corresponding huge risk. This is the reason why another analyst Otavio Costa of Crescat capital advised Crypto investors to risk between 1-2% of their total net worth.
He said that now is the ideal time for investors to accumulate Gold and Bitcoin as safety assets. In Costa’s analysis shared on Twitter, he says that the yield curve has surpassed the 70% benchmark. This means that a recession is around the corner. In addition, the instability posed by geopolitical and economic affairs are threats to global economic growth. He, however, emphasized that Gold is the much better safety asset then followed by Bitcoin. He said:
“Bitcoin is limited in supply like precious metals and in that sense could be a valuable call option on inflation”.
Bitcoin technical analysis: Elliott wave
Bitcoin had a massive surge in the first half of 2019 to end the 2018 bearish trend. The dip from $13,800 (June 2019) looks corrective and deep. The price breached the 61.8% Fibonacci retracement level at $7,270. However, it’s is finding its way back. In the last update, we used the chart below (Charting tools from TradingVew)
The price broke below the $7,300 support level as the new chart below shows. This has thus exposed the cryptocurrency to lower support zones at $5,000-6,000 and $4,500-5,000.
The rally to $13,800 completed an impulse wave. The dip from $13,800 is completing a double zigzag pattern. Buyers will look at price reaction at $5,000-6,000 support zone. Unless a massive surge causes a break above the channel, the BTC price will drop lower.