Bitcoin is currently trading below $64k as it failed to recover from its losses of yesterday. The largest digital currency by market capitalization is still however, rising in the long-term and in on track to higher closes later on. Analysts are predicting anywhere between $80k-$120k max value at the end of the bull run.
There is also a lot of speculation around the short-term conditions for the crypto sector. This is because two major events are coming up in the weekend that will help determine the short-term trend.
Bitcoin is currently trading around $64.5k at press time. Hardly 48 hours ago, the digital currency was trading above $68k and looking to challenge the $70k resistance. However, a problem in the derivatives sector forced the sector to go on the defensive. This was caused by a sudden reduction in the funding rates on major futures exchanges. This led to the index dropping spectacularly below $65k and then further below $64k earlier today despite meek recoveries in between.
While this is a new challenge for the bulls who are looking to bring the index above $70k as soon as possible, the recent dip can actually be a positive thing for the crypto sector overall.
According to popular trader and analyst Decentrader, the short-term conditions are still quite bearish and therefore, a deeper price pullback can be expected. The leveraged long traders are especially taking a beating from more short-term sellers. However, the HODLing data is still quite strong and most aren’t looking to liquidate their accumulations that easily and that is a positive sign. When the short-term sellers are exhausted eventually, that is when new all time highs can be expected.
According to Decentrader:
“We remain bullish on high time frames and continue to expect the price to rally up to the $85,000 –$90,000 region in the coming weeks, which aligns with the 1.618 fib retracement level,”
Sunday sees two major events that will affect the Bitcoin price directly. They include the SEC decision on possible Bitcoin Exchange Traded Funds (ETFs) and the Taproot soft fork. The ETF decision is a big one as it has helped push the bullish cause further as the regulator has shown positive reception this time around. However, given that the SEC has remained tight lipped about the decision, it could easily go either way.
The Taproot upgrade is an on-chain matter and is the first major such update in the BTC network since SegWit upgrade in 2017. It will see a host of new functions added on the Bitcoin network including smart contracts features which can help increase the overall appeal of Bitcoin.
If all goes well i.e. the SEC allows an ETF and the Taproot function deploys without issues, Bitcoin can easily overcome the latest bearish pullback and look towards new all time highs, possibly above $70k. If not, the bearish cause will see a first major uplift in quite a while and that might translate into a much deeper pullback.
Image Source: flickr.com
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