January 11, 2020 | AtoZ Markets -Bitcoin gained over 20% from $6,500 in December to $8,450 in early January. The recovery was largely attributed to the geopolitical tension in the Mideast between the US and Iran. Its market dominance quickly surged to 69.1% and thus took the crypto market to $220 billion in capitalization. Prior to the surge, there was a critical level at $8,500 and a reaction was expected. The price eventually hit $8,500 and quickly slumped to $7,750 before the current recovery above $8,000. Risk appetite is returning to the market as the US retreats to fire economic missiles instead. By so doing, safety assets ended this week negative. Bitcoin, on the other hand, is about to end the week with over 10% gain.
Although Bitcoin has not yet largely been adopted as a safe-haven asset in the class of Gold, crypto bulls are optimistic mass adoption will increase this status in 2020. By some, Bitcoin has been called the digital Gold. It by far out-performed Gold in the last decade and will most likely repeat the feat this decade. Meanwhile, the Bitcoin market could spend the first quarter of the year finding new lows below $6,000. However, after the next Bitcoin reward halving, prices are expected to surge. This could commence around the 2nd quarter.
Bitcoin price analysis: Elliott wave perspective
Unless a fast rally happens above $10,500, the Bitcoin bearish run from June will continue. Technically, the rally from $6,500 looks corrective. The larger degree double zigzag pattern from $13,900 is not yet complete. Therefore, Bitcoin price could extend losses below $6,000. In the last update, we used the chart below. (Charting tools from TradingView).
At this point, we looked at wave Y starting from $10,500. wave (a) of Y ended at $6,500. Wave (b) could extend to $9,000-9,500. However, the strong resistance zone around $8,500 could drag prices further downside. As expected, there has been some reaction around $8,500 after the wave (b) zigzag completed. The new chart below shows the new update.
Wave (b) retracing 50% of wave (a) at $8,500 adds to the significance of the resistance level. We can start counting wave (c) of Y if price breaks below $7,682. Wave (c) could extend to $5,000 or below. However, the price should stay above the $3,100 2018 low. In the end, the long-term bullish trend should resume and aim the $13,900 2019 high.
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