After reaching an all time high of $3490 on Tuesday, the Bitcoin market has been testing support at $3300 as many traders decided to take profits and exit their position. There have been quite a few sensationalist articles in the media claiming Bitcoin price will reach $5000, and even $10,000. It is unlikely that Bitcoin’s price will double or triple in value in the next year, but will the bullish momentum continue in the next coming days?
Because Bitcoin’s price is in uncharted territory, technical indicators are quite unreliable when analyzing the market. However, given the data we have so far, one interesting indicator to notice is the formation of a nasty head and shoulders pattern. Unfortunately, an H&S pattern signals a bullish to bearish trend reversal. Taking a look at MutexLock‘s chart on Tradingview we can see that pattern highlighted:
The good news is, the increasing amount of volume could be enough to keep the price above the support line. Furthermore, with the RSI hovering under 30%, it is a sign that BTC is undervalued and has potential for further price increases. Because of the constant volatility and ATH territory, one’s price prediction theories really depend on which indicators one values more.
An interesting event which could have created more negative pressure in the market is BTC-E’s most recent announcement about the state of their users’ funds. Apparently, even after the seizure of the exchange, BTC-E still has control of roughly 55% of users’ funds. The exchange goes to claim that users with funds on the exchange will incur a socialized loss of 45% and will be able to withdraw their funds after passing new KYC / AML verification. The BTC-E team pledged that withdrawals will be setup by the end of August.
This announcement created sell pressure on the market as traders realized that when the exchange finally allows users to withdraw their Bitcoins, those coins will end up on the market. In response, some traders decided to take profits while the price is high and will most likely wait until September to buy back in.
To finish off on a good note, taking a look on Google Trends we can see Bitcoin’s popularity is on track to hit a new all time high. Google trends has always been a reliable indicator in predicting when more newbies get into Bitcoin, when interest in a cryptocurrency rises so does its price.
With the upcoming activation of SegWit and the successful completion of the Bitcoin Cash fork, something new is happening in the world of Bitcoin every day. This quick movie-like progression of Bitcoin is what attracts enthusiasts and investors alike. As more and more mainstream media report about the various events, more interest builds in the cryptocurrency. On second thought, maybe Bitcoin’s price can double in the next year, what do you think?