The bitcoin price collapsed as low as $9,574 on Wednesday, sliding back below the psychological $10,000 barrier again.
Traders have repeatedly failed to hold the $10k level suggesting that bears have taken hold of the market for now. Technical analysts expect bitcoin to fall further before buying pressure returns.
The longer-term horizon, however, is a brighter picture. Pantera Capital sees $42,000 as a realistic price target for the end of the year.
Bitcoin price is struggling. | Source: TradingView
Bitcoin price faces short-term pain
The failure to hold $10,000 is likely to result in a stronger pullback for the dominant cryptocurrency. As trader Josh Rager points out, BTC is printing lower lows and lower highs on the daily chart.
If the trend continues, he expects bitcoin to fall to support levels around $8975 or below. On Telegram, he noted that any buying activity is relatively weak:
“[The] price continues to break down after every so-called “rally” which has led to lower-highs each time.”
$BTC looks to be creating lower-highs and lower-lows on the daily chart
Marked are the open and support areas based on the weekly chart with previous support possibly flipping to resistance
If confirmed, watching the next weekly support at $8975 as a potential target pic.twitter.com/yG2WO2yrzX
— Josh Rager 📈 (@Josh_Rager) July 23, 2019
BTC price fundamentals remain strong
Technical analysis aside, bitcoin price fundamentals remain strong and the catalysts for further grow are still in play. Per a Coinmetrics report this week, bitcoin’s “realized cap,” which values each piece of the supply at the price it last moved, grew in the last even days despite downwards price pressure.
Meanwhile, the long-anticipated institutional Bakkt trading platform began testing this week. In a note to CCN, a Bakkt representative confirmed:
“User acceptance testing started yesterday on ICE Futures U.S. for the Bakkt Bitcoin Daily and Monthly Futures contracts. Testing is proceeding as planned with participants from around the world.”
The CEO of TD Ameritrade also confirmed that demand for bitcoin trading is strong among clients.
Bitcoin to hit $42k by year-end
Despite the short-term pain, the broad horizon remains positive for the bitcoin price. Pantera Capital CEO Dan Morehead sees BTC realistically hitting $42,000 by the end of the year, a 342 percent rise from today’s price. Speaking to Unchained’s Laura Shin, he explained his logic:
“Graph the price of bitcoin logarithmically and its trend has been to grow at 235% compound annual growth rate. That puts BTC at $42,000 at the end of 2019. I think it’s a good shot that at the end of the year we hit that.”
His long-term range is even more bullish. Extrapolating the trend, he sees the bitcoin price hitting $122,000 by the end of 2020 and $365,000 at the end of 2021.
Click here for a real-time bitcoin price chart.
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Author: Ben Brown