Despite continued calls for an incoming correction, Bitcoin has managed to regain its position at around $8,000 after a tough weekend.
On Friday, bearish analysts looked like they had been correct when Bitcoin dropped sharply to around the $7,200 mark. An impending crash looked imminent but as American markets closed Sunday evening Bitcoin shot right back up to previous highs just below $8,000. This is the second time Bitcoin has found significant resistance just below $8,000, indicating a strong possibility that the level will create a new support point in the future.
Ethereum (ETH), on the other hand, has begun to lose support this morning, dropping quickly from 262.79 to $248.90 within the space of an hour. The coin was on track to break past $300 last week after days of impressive gains but suffered impenetrable resistance at $270.
What’s ahead for Bitcoin?
With the next Bitcoin halvening coming in just under a years time, analysts have been drawing comparisons to the price of Bitcoin one year before previous halvenings. A halvening is an event designed to maintain Bitcoin’s scarcity by reducing the reward paid out to miners for successfully mining individual blocks on the blockchain. The Bitcoin code is programmed to automatically reduce the reward by half every time 210,000 blocks are mined. This equates to roughly every four years and will happen again in May next year when the reward gets reduced to 6.25 Bitcoin.
Twitter trader The Rhythm Trader (@Rhythmtrader) posted a tweet last week showing the incredible price jumps that occur one year before and one year after halvening events. After the first halvening, the price jumped by an incredible 40,000 percent, from $2.55 a year before to over $1,000 a year later.
The second halvening wasn’t quite as extreme but still represented an almost 1000 percent increase from $268 to $2,525. Hopefully, the price increase on the next halvening isn’t 40 times less than the previous one or we will only see a 25 percent increase.
The recent price jump has put Bitcoin in strong buying territory. The 14-day relative strength index (RSI) is neutral at 71.08 with the MACD at 712.55 suggests a buyers market.
TradingView trader “goldbug1” is very bullish for Bitcoin and sees a clear path to $24,000 for the crypto asset. He believes the current price level is entering the end of consolidation and anything below $7,000 should now be considered a good buying opportunity before the next big rally. With the added liquidity incoming from large financial trading platforms like TD Ameritrade and E*Trade adding support for cryptocurrencies, it’s certainly a likely possibility that $24,000 is a long-term possibility.
Popular crypto trader Josh Rager recently noted that if Bitcoin closes above $8,300 this week then we will likely see a move to $9,600 in the short term. With a strong wave of bullish sentiment and good technicals, it certainly looks like this week will see higher highs for the king of crypto.