Last night bitcoin yet again dropped below $9,000 to $8,989. Since the beginning of this week, BTC has lost 6% of its value.
Currently, we are hovering around $9,250 while managing $2 billion in ‘real’ volume.
Despite this price action, the long-term view of bitcoin remains as bullish as ever as analyst Cole Garner said, “I am massively bullish on Bitcoin.”
But in the short term, pain could be ahead as “the next big move is likely down,” he said.
This is because of several factors that point that odds are currently in favor of bears. To start with, as we shared, miners are moving vast amounts of bitcoin, which hasn’t been seen this year.
Some mining pools moved millions worth of bitcoin through over-the-counter (OTC) trading desks while about 2,650 BTC — the most substantial flow of bitcoin from miners to exchanges in over a year — are sent to Bitfinex crypto exchange.
This doesn’t speak well for BTC price.
Moreover, on the same exchange, the whale buy wall is eroding and hasn’t been replenished yet.
What’s more, is the order book of the exchange is skewed massively to the sell-side for almost six weeks, which the analyst said has been an “accurate leading indicator of bitcoin’s next move nearly every swing for the past nine months.”
Adding to this selling pressure is the CME traders who are “massively net short BTC and have been for many weeks.” Institutions have been this net short once before when bitcoin was hovering around the same price level in February 2020.
A dip before the roaring bull market
Technically, the analyst says we are still in a “bull market territory” and a break below the volume-weighted average price (VWAP) — the average price an asset has traded at throughout the day, based on both volume and price — is a “juicy” buy the dip opportunity.
“Could be the last BTFD below $10k. Ever,” he said, which, to point out, bitcoin has never let work in anyone’s favor.
So, where to next?
Market traders and analysts have different targets, with the majority of them seeing the world’s leading digital currency going down to at least $8,000 level and some even around $7k.
Given Bitcoin’s still elevated correlation with the S&P 500, just yesterday in another bout of volatility stocks commodities and crypto all were sharply lower over the rising coronavirus cases; it also depends on how well global markets hold up.
“I suspect we’ll see a drop to the $7800-$8200 area. Outside chance, it goes as low as the mid-$6k range. I don’t expect it to go lower,” Garner said. If bitcoin breaks down, altcoins can crash, but still, all-time highs are expected by the end of the year, he said.
The bullish factors are present in the form of active addresses that have reached 900,000 not seen since the 2017 bull run. Also, we’re very close, mere weeks to a hash ribbon buy signal.
This is in the short term as in the big picture, a “roaring bull market” is expected to be right around the corner.