Bitcoin Price Defends Critical Support Following Pullback; Bulls Eyeing Reversal
Hopes of a bullish revival for bitcoin have not been lost in spite of the recent pullback, as the cryptocurrency continues to trade above a psychologically significant inflection point. The real test is whether bitcoin can maintain its holding pattern for the rest of the week as bearish headwinds subside.
Bitcoin Price Update
The bitcoin price stabilized Wednesday following a nearly 6% plunge earlier in week. The largest cryptocurrency by market cap has spent the majority of the trading session above $6,400, a level that proved difficult to penetrate following the most recent bear cycle.
More importantly, bitcoin is trading well above the psychologically important $6,000 support. Defense of this level in the coming days could ensure that the scale does not tip in favor of the bears.
Beyond this point, BTC shows no immediate threat of re-testing last month’s swing low of around $5,760.
At last check, BTC/USD was hovering around $6,410, where it was virtually unchanged compared with 24 hours earlier.
At the time of writing, upward momentum is being constricted by diminishing trade volumes, with turnover hovering below $4 billion. As Hacked previously reported, daily turnover of $4 billion or greater is commonly associated with higher prices. Volumes exceeded that critical level earlier in the day as prices rebounded from a daily low of around $6,320.
The broader cryptocurrency market remains in a holding pattern in anticipation of bitcoin’s next move. The total value of all cryptocurrencies in circulation was little changed at $253 billion following a deep $20 billion plunge on Tuesday.
Bitcoin Bulls Come Out in Full Support
Bitcoin’s prolonged downtrend has tested the resolve of its most ardent bulls, but for the likes of Tom Lee and Julian Hosp, there’s still plenty of reason to be optimistic.
Hacked reported last week that Tom Lee is maintaining his price target for bitcoin at $25,000 for the year. The Fundstrat co-founder was believed to have downgraded his position to around $20,000 before clarifying his outlook on national television. Lee maintains that bitcoin has historically traded at 2.5 times its mining costs. As the cost of mining a single bitcoin swells to $9,000 from the current level of $7,000, a price target between $22,000 and $25,000 is reasonable, according to Lee.
Meanwhile, TenX co-founder Julian Hosp is standing by his long-standing $60,000 price target. Citing positive regulatory developments, Hosp recently told CNBC he is “quite confident” that a prolonged uptrend is on the immediate horizon.
Interestingly, Hosp predicted last year that bitcoin will fluctuate between $5,000 and $60,000 in 2018.
The Forbes bitcoin price estimator is pegging end-of-year prices at around $10,000. Though significantly lower than what the bulls are saying, that represents an increase of 56% from current levels. The estimator calculates bitcoin’s future value based on multiple parameters, including transaction volumes and the number of users.
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.
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