Bulls and Bears Wrestle as Bitcoin Price Holds $7,500
If there was any doubt that the likelihood of a regulated bitcoin ETF was pulling the market strings, it’s been put to rest with the recent performance in the BTC price. Think back to early July when the bitcoin price couldn’t manage to break the key $6,800 level. It was stuck more in the $6,500 range. But when scuttlebutt of securities regulators approving a bitcoin ETF as soon as August began swirling, the excitement bolstered the BTC price first to $6,800 and then to $7,300 quickly and ultimately to levels it hadn’t seen since May at $8,400.
But once U.S. SEC officials voted against the Winklevoss bitcoin ETF, it’s been slow and steady declines in the bitcoin price to the current level of approximately $7,500. The bitcoin price wound up shedding approximately 7% over the past week.
But if you ask Bart Smith, who leads the digital assets group at Susquehanna, investors should notice a silver lining because the bitcoin price has been able to hold the $7,500 and avoid plummeting to $6,100.
Smith is watching for a couple of things to happen. “We must see higher highs and higher lows,” he told CNBC, pointing to the key levels in the bitcoin price that he is watching out for.
From there, he described two scenarios — one bullish and one bearish. “If the bitcoin price continues to break through and hold at $7,500 and bounce higher, I think it’s probably very bullish,” he said. On the other hand, if the bitcoin price were to break through the $6,800 level, Smith and the technicians he talks to believe it would be “very negative.”
Cryptocurrency trader Brian Kelly who is at the helm of BKCM believes the market sell-off will be short-lived, calling the price correction “normal.”
“[Bitcoin] had a pretty good run from $5,800 up to $8,300, $8,400 or so. So while it might seem crazy to the legacy markets and the bitcoin world, this is just a normal correction,” Kelly told CNBC.
Market participants have been saying that a bitcoin ETF this summer was overly optimistic, with some suggesting that a regulated bitcoin ETF making its debut sometime in 2019 was more realistic. Kelly is somewhere in the middle of that range, saying that the SEC could approve a product by year-end 2018 but not before that. The industry infrastructure such as custody solutions to secure institutional capital from the likes of pension funds and endowments not to mention banks must be more developed before the floodgates open.
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