Crypto Price Analysis: Bitcoin Is a Buy on Dips as Bakkt Launch Is Near

Bitcoin bull

The much-awaited launch of Bakkt is just a few weeks away. On September 23rd, the Intercontinental Exchange (ICE) operated company will make its platform accessible to both retail and institutional investors. Customers of Bakkt will be able to buy, sell, and store bitcoin on the platform.

Many crypto-enthusiasts see the launch of the digital assets custodial platform as an ultra bullish catalyst. For instance, Twitter user bitangler expects Bitcoin to skyrocket in the next 30 days as we approach the launch of Bakkt futures.

While the introduction of the futures platform is long-term bullish for the top cryptocurrency, we believe that it is due for one more leg down before it resumes its uptrend. If you’re a long-term investor, consider buying the dip because Bitcoin is in the early stages of a bull market.

Short-Term Bearish Case: Immediate Support Looks Exhausted

Many retail investors are jittery about Bitcoin’s recent price action. The cryptocurrency appears to be forming a large descending triangle pattern. This structure looks similar to the pattern that ignited the break below $6,000 support in November 2018.

Bitcoin bearish crypto chart
Bitcoin paints a bearish triangle on the daily chart | Source: TradingView

So far, support of $9,600 has been tapped five times over the last two months. In technical analysis, this indicates that the support is drained. The lower high that forms after each bounce affirms the view that bulls are exhausted.

Long-Term Bullish Case: Bitcoin Uptrend Healthy Heading Into Bakkt Launch

Although we expect Bitcoin to continue consolidating in the next few weeks, any dip should be considered as a strong buy opportunity. That’s because the cryptocurrency’s uptrend line remains intact despite the numerous pullbacks.

Bitcoin bullish crypto chart
Bitcoin still looking good despite the heavy correction from the 2019 top | Source: TradingView

Also, there are indications that the correction is about to end. The daily RSI has broken out of its downtrend line. In addition to that, we can see a bullish crossover on the daily MACD. These are indications of a resurging bullish momentum.

While we’re seeing these long-term bullish signals, it is important to note that the Bakkt futures contracts are settled in Bitcoin, not in cash. This is ultra bullish for the digital asset because the ICE-operated platform will remove BTCs from circulation and deliver them to their clients. This will reduce BTC supply on the open market, which will ultimately drive the price higher.

Bottom Line

Bitcoin may look bearish short-term but overall, the uptrend remains strong. Thus, any move below $9,600 support should be seen as a bargain. There may not be another opportunity to buy at discounted prices as Bakkt will begin to take out BTCs from circulation and physically deliver them to their clients in about three weeks.

The reduction of BTCs from circulation as futures contracts are settled in Bitcoin rather than in cash is one of the main reasons why we’re long-term bullish on the cryptocurrency.

 

Disclaimer: The writer 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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.