Bitcoin Sees Massive Rejection At $9,000
Just an hour or two ago as of the time of writing this, Bitcoin (BTC) breached $9,000 for the first time since early/mid-November, surging 3% higher from the $8,700 range equilibrium established earlier that day.
Since hitting $9,000, the crypto asset has paused, retracing to $8,900 as of the time of writing this as Bitcoin seemingly encountered vast selling pressure at the aforementioned key level.
Analysts flipped short-term bearish after seeing this playing out on the charts, noting that the extremely strong rejection at $9,000 is bearish.
Calmly, a full-time cryptocurrency trader that earlier today noted that Bitcoin’s price action suggested that upward continuation was imminent, remarked after this rejection that the one-hour candle makes it look like BTC has found a top, and may thus be subject to a strong reversal to the downside that may bring it to the bottom of the $8,500 to $8,900 range.
— Calmly | full-time trader (@im_calmly) January 17, 2020
Another full-time industry trader BitDealer has echoed this, posting the chart below showing why the recent drop at $9,000 has him worried about Bitcoin’s extremely short-term prospects.
Looking for 8.6k lows next pic.twitter.com/kcK7Ro4U9W
— ₿itDealer (@Bitdealer_) January 17, 2020
Medium-Term Trend Still Bullish
It is important to note that the aforementioned analysts are seemingly only short-term bearish on Bitcoin, with there still being an array of evidence suggesting the medium-term cryptocurrency market trend to be in the positive direction.
This evidence is as follows:
Adaptive Capital’s Murad Mahmudov, formerly of Goldman Sachs, recently wrote on Twitter that “bears are deluded at best, dishonest at worst,” drawing attention to the below chart which shows that BTC has crossed above a number of key moving averages. These are including but not limited to the 128-day simple moving average (SMA), 200-day exponential moving average (EMA), 50-week SMA, and 100-week SMA.
bears are deluded at best, dishonest at worst pic.twitter.com/mHedoqmSwL
— Murad Mahmudov 🚀 (@MustStopMurad) January 14, 2020
So while the rejection at $9,000 was had, BTC remains above these key levels, suggesting that the momentum in the cryptocurrency market is almost entirely bullish.
Not to mention, Fundstrat Global Advisors, a top market strategy and sector research company based in New York, recently identified three fundamental factors that will push BTC 100% higher this year, meaning a price of over $14,000:
- The Bitcoin halving: The crypto-friendly firm first looked to the May 2020 so-called “halving” or “halvening,” when the block reward of Bitcoin gets cut in half, effectively resulting in a 50% decrease in the inflation rate of the leading cryptocurrency. Analysts say that this should cause a supply crunch in the cryptocurrency market that could push prices dramatically higher. Not to mention, a price model created by pseudonymous quant PlanB, accurate to a 95% R squared when backtested, suggests BTC’s fair value will rise to $50,000 after the May 2020 halving.
- Geopolitical risk: Fundstrat next looked at potential geopolitical risks. With the ongoing conflicts between the U.S. and China, the U.S. and Iran, and other spats taking place across the globe, BTC may begin to prove itself as a digital, non-sovereign store of value in these trying times.
- 2020’s presidential election: Lastly, the firm looked to the 2020 elections. This point was not expanded upon, though there are notable a few candidates who are more crypto-friendly than others, such as Andrew Yang.
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