Bitcoin (BTC) is currently trading around $9,200 having just broken out of the falling wedge on the 1H Chart for BTC/USD. This is a strong bullish indicator and presents favorable buying opportunities. The price action signals a breakout to $11,700 at which point we will see some resistance. It is unlikely that Bitcoin (BTC) will break that resistance to move straight past $12,000 towards new highs. A few more weeks of accumulation seem to be ahead of us and Bitcoin (BTC) will likely bounce off the resistance at $11,700 to retest lower levels. However, as before accumulation will be swift with every drop in price.
Bitcoin (BTC) has recently seen a lot of buying interest with most of the bearish voices fading down. The whole blockchain industry has gained a lot of traction in the recent past and cryptocurrencies are like Bitcoin (BTC) is increasingly finding buyers in the higher echelons of banking and finance. Even traditional investors who do not know much about blockchain, altcoin or ICOs are eager to learn more about Bitcoin (BTC) and it will probably be the first coin they buy. We also do not have direct USD pairs for most cryptocurrencies which creates a big demand for Bitcoin (BTC). Investors have to buy Bitcoin (BTC) first in order to be able to buy other coins.
Last year was significant in crypto markets as we witnessed a big exchange of Bitcoin (BTC) from strong hands to weak hands and it is not over yet. Investors who plan to hoard Bitcoin (BTC) for ten, twenty years just like they buy and store bullion have no problem buying at $15,000 instead of $10,000. They will try to get the lowest price possible but if they see a play, they will buy instead of waiting for the bottom. On the other hand, there are investors who bought near the top and then sold at a loss. Few of those investors will ever want to trade Bitcoin (BTC) again. Perhaps they will buy again but 4 or 5 digit prices will be a thing of the past by then. The same is true of investors who are waiting for the “perfect bottom” in order to buy. Either they will miss out completely or they will end up buying at a lot higher prices.
Those who think that a 2014 style scenario may unfold need to think whether that is really possible given that most of us know and understand the value of Bitcoin (BTC) and also know that the price will rise again after the fall. This alone is a big factor as to why such a scenario is very unlikely. Having said that, there is no denying that there is still a lot of fear, anger and uncertainty in the market considering there are many first time investors. This makes it easy for smart money to shake out these weak hands by manipulating the price short term to lead them into thinking this is the end of Bitcoin (BTC) and all cryptocurrencies. Once they get their Bitcoin (BTC), the price starts rising again without them onboard.