Bitcoin is finally showing some strength after a brutal correction to $16,200 earlier this week.
The leading cryptocurrency has bounced to $18,000 as of this article’s writing, around 11 percent above the local lows.
The coin is expected to see small gains ahead of the weekly close, though analysts are divided over what’s next for Bitcoin from a weekly perspective.
The Bitcoin bear case
The current bear case largely hinges on the fact that in previous bull markets, BTC regularly corrected by 30 percent, then moved to new all-time highs. Bitcoin dropping 30 percent from its recent highs would mean a drop to the $14,000 region. BTC hasn’t reached that price point yet as we well know.
“Bitcoin Jack,” a pseudonymous cryptocurrency trader that predicted the move to $18,000 many weeks ago, recently shared this chart. IT shows that BTC may be on the verge of breaking below a key technical cone/wedge pattern. He previously said that he is looking to open short positions on Bitcoin.
Jack also called Bitcoin’s move to $10,000 when the coin bottomed in March.
This was echoed by another historically accurate trader who argued that Bitcoin could return to $15,000 before moving higher again.
Ki Young Ju, chief executive of CryptoQuant, also noted that there is on-chain data suggesting the market will face a correction or at least some consolidation. Referencing how there is likely going to be decreased Bitcoin buying pressure due to a lack of stablecoin deposits, he said:
“$BTC would go sideways or bearish in the short-run I think. 1/ The number of #stablecoin user deposits on all exchanges is decreasing. I think buying pressure is too weak to break $20k at this moment.”
$BTC would go sideways or bearish in the short-run I think.
1/ The number of #stablecoin user deposits on all exchanges is decreasing. I think buying pressure is too weak to break $20k at this moment.
— Ki Young Ju 주기영 (@ki_young_ju) November 29, 2020
There are some bulls, though. The bull case seemingly hinges on two things: 1) consistent institutional buying pressure, and 2) the fact that the funding rates of Bitcoin futures markets have reset after the crash.
Long-term uptrend intact
What’s important is that even the short-term bears are long-term bulls. That’s to say, many expect a correction to only be a small part of a bigger bull market.
As reported by CryptoSlate previously, on-chain trends show that there is a large amount of institutional accumulation of Bitcoin taking place. Lucas Nuzzi, an analyst at Coin Metrics, said on the matter:
“Multiple outlets have reported that Chinese miners haven’t been able to sell their BTC in Nov. because of a regulatory crackdown. As I’ve covered previously, there is no on-chain evidence of that. In fact, the opposite seems to be taking place: BTC held by Miners is down in Nov.”
The overall sentiment seems to be bullish as the U.S. dollar continues to fall against foreign currencies.
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