On Thursday Bitcoin bears finally got the moment they’ve been waiting for with BTC price plunging from $12,000 to below $10,000 before rebounding to $10,500 at time of writing. But is this a ‘top’ or just a standard pullback during a bullrun? And if it’s the latter, what are some levels of interest for buy-the-dip bulls to target?
The Bear Case
With 2 days until the weekly close, Bitcoin is at risk of losing a level that’s acted as a critical swing-point no fewer than 8 times since the bullrun of 2017. If it fails to hold this level now, and doubly so if it then confirms the support/resistance flip from the bottomside, one can only expect Bitcoin to be in for a deeper correction with an initial target of $8,400 followed by somewhere between $6,600 and $6,000.
The Bull Case
First off, it would be shortsighted to discuss BTC’s price outlook without looking at the macro picture of its place in history, ushering in a digital financial revolution during a time of unprecedented currency printing by the Federal Reserve. Much like physical gold, Bitcoin is seen by many as a hedge against world-wide inflation and the reduction of fiat’s forever sinking purchasing power. If there was ever a time for a digital, decentralized, and finite currency it would be during a pandemic that has destroyed economies around the globe and sowed increased distrust in governments’ ability – or desire – to take care of their citizens.
With that in mind, as long as price is able to hold this current range of $9,500 to $10,000, the pain of the past 48 hours may end up being nothing more than a final 4-digit buying opportunity. A deeper dip to the $8,400 level would still preserve the bull-market if it can confirm as support and will likely be a heavily targeted area for Bitcoin bulls.
Yaniv Son is a cryptocurrency trader and former professional poker player turned poker coach and author at spinandgostrategy.com