Bitcoin prices have repeatedly suffered weakness over the last several months, and recently, a Bloomberg analyst predicted that the digital currency could fall to as little as $4,000.
“Bitcoin is in dump mode, following the pump run-up on the potential for a U.S. ETF,” Bloomberg Intelligence analyst Mike McGlone stated during a recent interview.
“It may not subside until revisiting good support near $4,000 — last year’s mean.”
This possibility could very well materialize, according to a handful of market analysts.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
“Bitcoin has been trading in a very stable range over the last few months with buyers stepping in just above the $5,000 handle and on the top, we have the 200 day moving average acting as a perfect point of resistance,” stated Mati Greenspan, senior market analyst for social trading platform eToro.
Below is a chart illustrating Bitcoin’s price movements over roughly the last year, as well as the cryptocurrency’s 200-day Moving Average.
He added that “The best thing for crypto adoption would be to stay in this range for a while but of course, a breakout in either direction is always a possibility.”
Jon Pearlstone, publisher of the newsletter CryptoPatterns, also weighed in on Bitcoin’s technicals.
“Bitcoin bounced off our key support level of $6200 and needs to move back above $7000 quickly without any [sizable] pullbacks to maintain the recent bullish trend,” he stated.
“Otherwise, much lower prices become a real possibility in the near future.”
Going forward, he suggested that traders “watch for a test of the 2018 lows at $5800.”
Bitcoin Market’s ETF Fixation
While Greenspan and Pearlstone focused on technical indicators, other analysts asserted that cryptocurrency traders are preoccupied with the U.S. Securities and Exchange Commission’s (SEC) recent decision to delay the ruling on the VanEck Bitcoin exchange-traded fund (ETF).
Charles Hayter, co-founder and CEO of digital currency data platform CryptoCompare, stated that Bitcoin’s recent price declines are simply the market responding to this move.
If the government agency opts to reject the ETF, it “may be the trigger which sends bitcoin to yearly lows.” noted Matthew Newton, senior market analyst at eToro.
However, should the fund receive approval, it could “send the price soaring.”
Disclosure: I own some Bitcoin and Ether.