Bitcoin Holds Key Support with $10,000 Price Target Still In Effect
Bitcoin’s definitive break above $9,000 has pushed markets into consolidation mode this week, as the leading digital currency struggled to extend its longest winning streak in nearly a year. Despite limited upside in recent days, bitcoin continues to hold critical support, setting the stage for a deeper bull run in the near future.
The bitcoin price traded between $9,036 and $9,211 on Bitstamp Wednesday before consolidating at the midpoint of the range. At the time of writing, the BTC/USD exchange rate was valued at $9,139, having gained 0.7%.
Bitcoin’s technical picture remains bullish, based on the daily chart. A relative strength index (RSI) of 64 suggests that momentum is firmly on the side of the bulls. The accumulation/distribution trend clearly shows that the buyers are still in control.
Over the 24-hour trading cycle, bitcoin’s price is down 0.7%, according to CoinMarketCap’s aggregate data feed. Still, at current prices, bitcoin’s market cap is worth $162 billion, having more than tripled since December.
Bitcoin’s share of the overall crypto market has declined slightly over the past day, falling to 56.7% from a high of 57.4%.
Based on current price trends, bitcoin is likely to test $9,600 in the short term, leading to a potential rally towards $10,000. All of that hinges on its ability to hold above key support in the mid-$8,000 region.
Tom Lee is Back Making Predictions
Fundstrat’s Tom Lee believes bitcoin’s bull market is only just beginning and that a new record high is a practical certainty.
“I think bitcoin is easily going to take out its all-time highs” near $20,000, Lee told CNBC on Tuesday. “We’re deep into a bull market, and people are pretty silent about it.”
Lee even dared to predict $40,000 BTC if adoption and use cases continue to grow.
While Lee doesn’t have much credibility in terms of price targeting, his firm’s research has highlighted important trends in bitcoin’s price. For starters, Fundstrat has showed that, on average, bitcoin generates all of its yearly gains over a ten-day period. Those aren’t consecutive ten days, just the best ten days in a given year. If you remove those ten days, bitcoin’s price is actually down 25% since 2013.
Lee’s colleague Robert Sluymer, who has a far better track record of predicting price trends, recently told clients to “increase exposure” to bitcoin. Sluymer accurately predicted the crypto crash of late 2018 and its subsequent breakout in early May. Read more: Bitcoin, Litecoin Take the Reigns Again as Crypto Bulls Eye New Highs.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.