Jaipur (CoinChapter.com) — Bitcoin price is attempting to chart a recovery post a gigantic crash from the top near $65,000 to $30,000. But few analysts are skeptical about this “relief rally” and have called it a “bull trap.” They portend BTC to fall to 2017’s all-time high level of $20,000. Will it happen?
Another Bitcoin Dump Ahead
According to a widely followed Twitter handle, “Crypto_goat_,” BTC’s latest attempt to move upwards could hurt new market entrants. Meanwhile, Seeking Alpha noted first-time bitcoin investors could incur serious losses as this attempt for recovery is nothing less than a massive “bull trap” — or a “dead cat bounce.”
And not just Crypto_goat_, veteran futures/FX career trader Peter L Brandt also cast bearish shadows on bitcoin’s near-term market outlook. While sharing his worst-case BTC price scenario in a tweet yesterday, Mr. Brandt “envisioned” the flagship crypto coin to drop to $21,000.
But then the trading aficionado also hinted that the bitcoin market’s worst correction fears are almost over. By dropping to $30,000, BTC has fulfilled “80% of the worst-case drop” scenario. And that’s why there was no need to exit non-leveraged long positions on BTC.
The above calls for another bitcoin crash to $20,000 would make sense in the light of miners pulling out 3012 BTC off their Poolin wallets, as pointed out by Lex Moskovski, Chief Investment Officer at Moskovski Capital.
But Will It Happen Though?
Miners And Famous Backers Accumulating More BTC
The Moskovski Capital CIO’s update on Poolin miners withdrawing BTC en-masse presents a bearish scenario. But CryptoQuant has something different to say. According to the on-chain trading data provider, bitcoin mining hashrate has picked up in earnest, and miners are actually accumulating BTC.
In a “quicktake” update on its website, CryptoQuant analysts wrote:
$BTC hash rate rebounded, and miners seem to be accumulating bitcoins.- Miners are holding BTCs – SSR is hitting ATL for a week * BTC SSR is total BTC / All Stablecoins, which could be interpreted as (cryptocurrency/amount of capital) in the market.
Also, the amount of BTC sent to exchanges by miners has dropped considerably. This indicates that minters of the flagship cryptocurrency are not yet ready to cash in their profits. That they are waiting for an upsurge in prices to realize a better value.
Whales, too, have been filling up their BTC stashes. As reported by CoinChapter, the 4th largest bitcoin whale, recently bought a total of 1914 coins.
Apart from this, prominent folks who back bitcoin have contemplated buying the current dip. The Mayor of the city of Miami is one of them. In a recent interview with CNBC, Mayor Francis Suarez showcased increased conviction in BTC to retain money’s value. He admitted having bought bitcoin when the US government passed the $1.3 trillion stimulus bill to hedge against inflation.
Technical Pointers Point To A Breakout Instead Of A Drawdown
Plus, the technicals surrounding the bitcoin price are pretty solid at the moment, as we pointed out in our recent article. On the daily chart of bitcoin price against USD, the top digital asset is looking to print a breakout rally.
RSI (Relative Strength Indicator) indicates the strength/weakness of an asset based on market conditions and is beginning to look up. The MACD indicator in which two inter-crossed trendlines help predict the direction of an asset’s price has also printed a bullish crossover.
In the light of the above bullish arguments, bitcoin price could chart an upward trajectory. But then we all know how precarious capital markets can get. Will BTC rally up north or freefall down south? It remains to be seen.