Bitcoin may crater to $5,000 before rallying and hitting all-time highs in a contrarian move that few people foresee.
Presently, BTC is trading at over $9,500, a previous resistance, now supports, and just a few hundred dollars away from $10,000, an important round number.
Bitcoin Surged 30% in January 2020
I think we'll see $5,000 before new all-time highs. $BTC
— Zack Voell (@zackvoell) February 5, 2020
Although the observer’s position could be valid, nothing can be taken away from Bitcoin’s performance over the last trading month.
In January, the coin added 30%, building on December 2019 gains, and fanning buyer’s expectations of better prices, a few months before a definitive halving.
Fundamentals and Technical Candlestick Arrangements Support BTC
Presently, most traders are upbeat.
However, not all are super bullish. Comments as above could be valid and supported not only by technical candlestick arrangements but by fundamental events.
Already, President Trump has been acquitted by GOP Senators. Given the nature of such political and constitutional power games, some investors were taking nothing to chance.
It was observed that prior to voting, BTC temporarily soared to $9,700 before cooling down.
The elimination of uncertainty will likely play against BTC and other safe havens as Gold, Japanese Yen, and the USD, for example.
A Deep Retracement Will Liquidate Millions worth of BTC Longs
From the charts, it is imperative that buyers build on yesterday’s super gains and a whole bar closes above the $9,500.
That will cement the current trend and perhaps set the stage ready for further gains towards the $12,000 and even June 2019 highs of $13,800.
Failure and a turnaround would confirm the $9,800-$10,000 zones as an important resistance zone, and a reason to dump BTC until the CME Gap is closed.
Already, one trader is warning of a deep BTC correction. However, Bitcoin’s correction won’t be as deep and instead of $5,000, BTC would drop to $8,500 zone.
The results would see $100 million of longs liquidation at BTC derivative platforms.
“BTC is gonna dump hard this week and over $100M in longs will get wiped. Don’t say I didn’t warn you.”
$BTC is gonna dump hard this week and over $100M in longs will get wiped.
Don't say I didn't warn you
— Mac ❄️🐺 (@MacnBTC) February 2, 2020
All these are possibilities. However, Josh Rager, a popular crypto analyst, says bears are in denial and the bull ship has sailed:
“For you BTC bears in denial, the trend has officially changed & many still don’t seem to understand that. I made a chart to show you what it looks like when a trend changes to higher-highs and higher-lows. It’s a simple concept. BTC even closed above a key level at $9550”
“Pullbacks to be expected, the trend could even go back down, but for the past two months, bears have been shorting the uptrend. It will likely change once they realize that, lol.”
Pullbacks to be expected, the trend could even go back down, but for the past two months, bears have been shorting the uptrend
It will likely change once they realize that, lol
— Josh Rager 📈 (@Josh_Rager) February 6, 2020
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Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich