Bitcoin sell-off might resume after the quick rally to $10,600. The following Bitcoin price prediction is based on the Elliott wave theory.
August 26, 2019 | AtoZ Markets - Bitcoin rallied quickly to $10,600 on Monday, to hit its highest price in nearly a week. After the massive drop below $10,000, the crypto market had a lift and recovered some of the $50 billion that was shed since the 2nd week of August.
Meanwhile, the quick rally happened as a result of the trade war escalation. In the early hours of the Asian session on Monday, BTC had a massive uplift. As the US-China trade war intensifies, investors planned for the safety of their investments and moved from high-risk assets to significantly low-risk safe-haven assets. Gold, a safe-haven asset, quickly climbed to 1550 after gaining nearly 1.5% and the US Treasury yield dropped to its lowest in three years. For some time now, Bitcoin has been establishing itself as a safe-haven asset. This might be the edge it has over the Alts as its market dominance has increased to 69% from the 55% that was recorded at the beginning of 2019. Many crypto bulls have even suggested that BTC might overtake Gold in the future as the asset of choice for safety.
Meanwhile, the US President has called US companies to withdraw from China after he promised to impose more levies and tariffs on the Chinese good in the U.S. This is in contrasts to its tweet last week that the two countries are back to the negotiation table. However, from the current look of events, the relationship between the two giants is getting worse. If war continues to create tension in the market, the demand for safe-haven assets should increase. Bitcoin will most likely benefit.
Bitcoin analysis: important price levels
Despite the safe-haven advantage BTC now has, it seems it would return to the overall crypto market sentiment, which is bearish at the moment. The BTC price quickly retreated by $300 after hitting $10,600 and might drop further. To the downside, we now have the $9,500-$10,000 support zone which if broke downside, will most probably set a meeting with the $9,100 support. BTC might drop lower to $7,500 if $9,100 is out of the picture. The upside correction is, however, limited below $11,000. Unless a break above the $10,900-$11,100 resistance zone happens, the bearish correction will most likely continue.
Bitcoin price prediction: Elliott wave analysis
From the Elliott wave perspective, it seems the sell-off will continue. We have been looking at the dip from late June with the corrective eye of a complex double zigzag pattern. In the last update, the chart below was used.
We expected a bullish correction to $10,500 or its neighbourhood. The new chart below shows this is currently playing out.
The short term chart setup looks bearish. Price is expected to drop toward the $9,500 low. Unless a massive bullish push happens above the $10,900-$11,100, the sell-off is expected to continue.