Bitcoin price is trading at the $8,600 level, and buying BTC at these prices may make all the more sense. But why?
Bitcoin Already Corrected 20% from the Peak
Bitcoin is already down about 20% from its recent peak. In February, the leading coin touched levels above $10,400, before sliding back. After the crash, exacerbated by the overall market pessimism, BTC has now corrected significantly and may present buying opportunities.
/1 At the risk of looking like a fool by Monday, I want to make the case for why I am a buyer of Bitcoin at the $8,500-$8,600 level, near 20% off the recent local high. In a sea of shorts frothing about a continued plunge, it seems like the contrarian position to adopt. pic.twitter.com/9A1zKxKtS7
— light (@LightCrypto) February 28, 2020
The recommendation by crypto Twitter commentator LightCrypto comes with a caveat, that short-term fluctuations may bring the price down. BTC sentiment has turned bearish, with more scenarios for a deeper dip.
BTC traded at $8,736.78 on Saturday, overall remaining bound in a range between $8,500 and $8,900. The Bitcoin fear and greed index sank to 38 points, signaling “fear”, and there is talk of shorting the coin.
However, shorting accumulation has also worked to reverse Bitcoin and liquidate those positions. Even with relatively low price moves, BTC remains risky for a move in either direction. A recent analysis based on wallet acquisition showed that roughly half of BTC addresses are in the money. Prices above $8,000 also have the potential to ensure strong support levels.
BTC Still Boosted by Long-Term Bullish Sentiment
BTC also has the tradition of once-per-quarter corrections of 20 to 30%. The fall from peak prices has already happened, and the price is still above the 150-day moving average. BTC still has to lead up to its halving, potentially returning to higher valuations. Overall predictions see BTC easily regain $10,000 in 2020, while potentially going for highs above $12,000.
For that reason, traders with long-term bullish sentiment also view BTC as a potential buying opportunity at almost every price dip. The leading coin has shown it can dip lower, but also stage a very fast recovery, moving to a higher tier within days.
#BTC still Holding Short.. as long as we close below Daily 200sma at 8770 by end of day.. i am short term Bearish
close above… slightly short term Bullish
— cryptorolly (@CryptoRolly) February 28, 2020
Bitcoin trading also happens on a short time scale, with the possibility of quickly erasing support levels. Spot buying and futures positions differ in their intentions, as BTC price discovery is a matter of different time frames and sentiments. Bitcoin trading volumes remain high above $43 billion per day, though the bulk of trading has switched to Tether (USDT), which is used as a safe haven. USDT volumes reach $56 billion per day, waiting to flow into BTC.
What do you think about the move of Bitcoin to a lower price range? Share your thoughts in the comments section below!
Images via Shutterstock, @CryptoRolly, @LightCrypto