Bitcoin touched a yearly high of $19,400 before registering a 14% price correction last week. The price correction after three weeks plunged bitcoin prices to near the $16,500 mark on Friday. Bitcoin has managed to recover by almost $2,000 since then as its price touched a daily high of $18,569 and looks poised for another bullish price action.
The price correction last week did not come as a surprise, in fact, trade veterans went on to say that market pullback during the bull run is no big deal and Bitcoin has even seen price corrections up to 30%. The ongoing bullish rally has brought the same fanfare around crypto as it did in 2017, the only difference being traditional financial pundits are backing the king coin to drive further instead of downplaying it as an internet bubble.
JP Morgan Beleive Bitcoin Price Can Slide Further Down
JP Morgan Chase, the financial giants, had predicted earlier that bitcoin price could slump further as the initial ‘froth’ which carried the price of bitcoin for this long has cleared. Nikolaos Panigirtzoglou, strategist at JP Morgan in his analysis wrote,
“The previous froth in momentum traders’ positioning has been cleared to a large extent,”
The ongoing bitcoin bullish price rally is largely attributed to the institutional FOMO, where large hedge funds and traditional asset management firms have revealed that their institutional clients are actively adding bitcoin to their portfolio as they see it as an inflation hedge. JP Morgan strategist belive the flow of trade on Bitcoin Grayscale will be a key factor in determining further price action of bitcoin. He explained,
“A failure by the Grayscale Bitcoin Trust to receive additional inflows over the coming weeks would also cast doubt to the idea that institutional investors such as family offices have embarked on a trend of embracing Bitcoin as digital gold replacing traditional gold as a long-term investment,”
What’s Next For Bitcoin Price
Bitcoin started its bullish price rally almost a month back when it broke past the key resistance of $13,000 and since then the top cryptocurrency has managed to surpass any small resistance on its way to $19,000. The price correction was on the cards as bitcoin has already flash crashed twice while consolidating around $18,500.
At present, many are pointing towards the massive CME gap forming over the weekend which would prove to be a short-term hurdle for Bitcoin price. The gap has widened to almost $2,000 and the BTC price is expected to correct up to $17,000 to fill the current gap.
It is believed that bitcoin often tends to fill the CME gap before moving up or down, but not always as there are several unfilled gaps at $k, $9k, and $11k which haven’t been filled yet. However, the current CME gap is quite wide and would req
— Zack Voell (@zackvoell) November 29, 2020