Bitcoin Poised For Gains After Recent Pullback
Bitcoin prices are well-positioned to continue their upward trend in spite of the retracement they experienced over the last few days, according to several analysts.
The digital currency broke through $14,000 on October 31, reaching a fresh high for the year on CoinDesk.
However, the cryptocurrency quickly fell back, declining to $13,221.55 earlier today, additional CoinDesk figures show.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Multiple traders pointed to profit taking as causing this retracement, with Constantin Kogan, managing director of Wave Financial Group, stating that:
“As the price rises to certain levels, in this case to $14k, there is a massive withdrawal of BTC from trading platforms.”
He described this practice as “fixing the profits,” or profit taking.
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, also weighed in on this development.
“Bitcoin’s move between $12,000 and $14,000 was not sustainable since the market hadn’t quite tested the support at $13,000 before attempting the next resistance,” he stated.
“What followed was expected profit-taking and Bitcoin was bound to return to levels around $13,000.”
In spite of the recent pullback, he described the sentiment surrounding bitcoin as “bullish.”
Bitcoin’s Price Consolidation
DiPasquale also spoke to the consolidation that bitcoin has been experiencing between the $13,000 and $14,000 price levels, stating that it is “healthy for future price growth.”
Denis Vinokourov, head of research for London-based digital asset firm Bequant, took a similar stance, stating that:
“Consolidation at this stage should be seen as a healthy development for the market.”
Several analysts expressed a positive outlook for bitcoin’s future price movements, emphasizing their expectations for future gains.
“BTCUSD is currently struggling to break the $14,000 mark,” said Nicholas Pelecanos, head of trading at NEM Ventures.
“On the surface this might just seem like a usual pullback from a psychological level but historically a break of the final resistance before the all time high generally leads to the start of a more aggressive bull market.”
Tim Enneking, managing director of Digital Capital Management, also weighed in.
“$14k was certainly rejected, but that is hardly a surprise, nor bad news for BTC going forward,” he stated.
“The fact that BTC broke through $14k after so long and that the drop thereafter was only about 7% is actually a real show of strength,” said Enneking.
“If $13k holds, particularly in an atmosphere with so much uncertainty because of the US election and its aftermath, it seems clear that $14k will fall (on the way up) over the short term and that the ATH (all time high) will not be far behind,” he predicted.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.