Bitcoin's Uncertain Future: Price Rise or Plunge on the Horizon?
Summary:
Despite a 70% price gain since a November 2022 low, Bitcoin failed to maintain prices above $30,000 in recent months, sparking curiosity about future rises or drops. As per the Fibonacci fractal, technical data predicts a possible plunge to $21,500. Other factors including an ascending U.S. dollar strength index, on-chain metrics indicating potential repositioning among long-term BTC holders, and differing opinions among Bitcoin trading analysts further define the unclear future of Bitcoin prices.
The trajectory of Bitcoin (BTC) has shown a promising uptrend across this year, with an impressive 70% upswing since hitting rock bottom, close to $16,800 this past November 2022. These gains come despite uncertainties surrounding interest rate hikes and they've been fuelled by the growing anticipation of ETF approvals. Recent months, nevertheless, were disappointing as the cryptocurrency failed to maintain momentum above the $30,000 mark. Therefore, with still over 200 days until the 'bullish' halving period, the predicament on the minds of many traders is: Will Bitcoin experience another cash crash in the foreseeable future? As the third quarter winds down, let's deliberate on several possibilities.
Technical data suggests that the price of Bitcoin could plunge to $21,500 according to the Fibonacci fractal. Currently, the BTC price stands firm around the 0.236 Fib line on the Fibonacci retracement chart, this is calculated from the swing high of $69,000 (the peak of the market) to the $15,900 swing low (the local market floor). In essence, the static nature of the BTC price mirrors the scenario seen during the 2018 BTC price slump.
Data reveals that in 2018, the BTC/USD pair held steady around the 0.236 Fib line at approximately $6,790 for an extended period before plummeting to close to $3,000 in December. Interestingly, the descent to the $3,000 mark corresponds well with the multi-year rising trend line support (indicated in the chart as 'bear market support').
The currently flatlining of the BTC value at the 0.236 Fib line signals a potential nosedive to the next major support level - $21,500, denoting a 17.75% dip from present rates.
Simultaneously, the U.S. dollar strength index (DXY) - which gauges the strength of the US dollar against leading global currencies - climbed to its highest point since November 2022, thereby further jeopardising Bitcoin's position.
Notably, the recent surge of the dollar after the Federal Reserve's interest rate decision has painted the 11th consecutive green weekly candle on the DXY, spelling potential trouble for Bitcoin if the dollar continues its upward trend.
In terms of on-chain metrics, the landscape is less clear. Bitcoin's Coin Day Destroyed (CDD) metric, which tracks actions of long-term investors, surged on Sep. 19, implying some long-term BTC holders moved their coins around, indicating a potential repositioning or profit-realization.
Simultaneously, Bitcoin reserves across all cryptocurrency exchanges are diminishing, suggesting a rise in holding behavior amongst investors.
Analysis from Bitcoin trading professionals is mixed about future BTC prices. Noted trader, Skew, believes the BTC price may reach $30,000 by October, citing sparse ask liquidity near $27,000 that could trigger a breakout. On the other hand, fellow market observer Rekt Capital has not dismissed a price reduction towards $18,000 based on a pre-halving chart.
In conclusion, this article is not intended as investment advice or recommendations. Every investment move carries risk, and readers are advised to undertake comprehensive research before making a financial decision.
Published At
9/28/2023 8:12:06 AM
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