Is Bitcoin Building Support Above $18,000?
Bitcoin prices have been trading north of $18,000 since late last month, fluctuating above this level as the cryptocurrency benefits from multiple bullish factors.
The digital currency has stayed above $18,000 since November 30, according to CoinDesk data.
Several analysts commented on these price movements, offering perspective on whether the cryptocurrency is establishing support above this price level.
[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.]
Analysts Weigh In
“Bitcoin is currently consolidating between $18,000 and $19,000,” said Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital.
“We are also witnessing an ascending triangle pattern on the chart, and a breakout above $20,000 this month is a possibility,” he added.
“On the downside, there is decent support in the zone between $18,500 and $18,000,” noted DiPasquale.
Mark Warner, head of trading for London-based financial services firm BCB Group, also gave his two cents.
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“From a technical perspective Bitcoin is forming a decision triangle around the $19,000 level, with bearish divergence on the RSI (Relative Strength Index),” he said.
“This usually indicates the price action is cooling off.”
“That being said, the bears have not shown enough strength to get below $18,000, so we expect another visit to the $20,000 area this week,” added Warner.
Kiana Danial, CEO of Invest Diva, also provided input, pointing to a potential retracement.
“Bitcoin appears to be in the process of forming a double top bearish reversal chart pattern,” she stated.
“Due to its volatile nature, I wouldn’t be surprised to see a pullback before we see long-term gains, especially as the bullish hype seems to be dying down.”
“Based on Fibonacci retracement levels, the key support levels are at $17,600, $16,400, and $15,000,” said Danial.
Bullish Market Factors
While the aforementioned experts provided technical analysis, other market observers offered some additional thoughts on what is driving bitcoin’s price action.
Jeff Dorman, chief investment officer of asset manager Arca, spoke to the sentiment of investors, stating that:
“Everywhere you look, markets look extended, with very little fear.”
“Both the equity and Bitcoin fear and greed indexes are flashing caution,” he added.
“While the lack of fear itself should be causing more fear, the reality is, governments around the world” “are doing everything in their power to force investors into risky assets, and it’s working.”
Ray Youssef, CEO of Paxful, spoke to the digital asset’s growing “momentum.”
“Bitcoin is very close to going mainstream and it’s becoming a feasible alternative to stocks, commodities, and bonds,” he stated.
“We’ve seen an influx of attention to the digital asset from retail investors, institutional investors, and many major publicly traded companies solidifying trust in Bitcoin and more so its use cases,” said Youssef.
“Momentum has proved to be a powerful propellant, which can be attributed to a number of factors including fluctuating economic situations globally, the pandemic, and an increased understanding of the functionalities of crypto.”
“All of this and more will allow Bitcoin to become the new world currency.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.