Bitcoin Price Finds Support at $10,000 But Bears Likely to Push It Lower
Bitcoin price’s decline stalled at the $10,000 level, but the price action suggests a continuation pattern currently forms. After failing above $12,000, Bitcoin struggles, yet again, at the psychological round number.
Bitcoin had an interesting evolution this 2020. Its price action lags classic alternative investments (e.g., gold) and thus failed to offer the much-needed diversification benefits in times of crisis. Yet, its adoption increases by the day, becoming a more popular means of payment.
Only recently, the Swiss canton of Zug announced that starting with 2021 it will allow people to pay taxes in Bitcoin. This trend has nothing to do with the Bitcoin price, mostly driven up or down by speculators. Instead, the increased adoption rate reveals an asset, albeit a digital one, that people find more uses for it the more the time passes.
Unfortunately, few investors are in the crypto space for the adjacent investing opportunities. Instead, most are for the high volatility and speculation opportunities that Bitcoin may offer. Well, this year at least, the Bitcoin price did not offer the same volatility as it did in the past.
Moreover, other financial assets, like gold or even the stock market, surpassed Bitcoin when it comes to returns and volatility. However, Bitcoin remains an asset that gains traction, and an investment for the long-term still makes sense.
Bitcoin Price Technical Analysis
In a simplistic form, the recent price action on the Bitcoin four-hour timeframe suggests a temporary bottom is in place. The market tried twice at the same level – and failed to break much lower. Because of the somewhat horizontal consolidation, we may think of a continuation pattern like a triangle or a flag forming.
Both aggressive and conservative traders have an opportunity to short. Aggressive traders may want to give it a push lower by the time the price breaks the $9,800 level. That is the area Bitcoin failed twice, and on a third attempt, it may break further. Conservative traders may want to wait for $10.600 before selling. In both cases, the $11,600 acts as invalidation and $7,500 as take profit.