Bitcoin Prices Top $9,000, Traders Eye On $10,000
Bitcoin prices topped $9,000 last week and put the token on track to move higher in the near-term. The move resulted in the breakdown of a significant resistance level that had been keeping prices in check. Now that resistance is broken down prices are likely to keep rising but just how far can they go? Simple technical targets based on the peaks set in 2018 suggest $10,000, $12,000, and $16,000 are logical targets.
Projecting technical patterns like the run-up to, and subsequent break of resistance at $8,500 gives an equally optimistic target. The magnitude of that move is $5,300, projecting it from the $8,500 resistance line gives a target near $14,000. Momentum is slowing winding down but that is not a concern at this time. momentum remains firmly bullish and is likely to remain so for the foreseeable future. At current levels, the MACD histogram could take several months to wind down to zero and in that time BTC may have already surpassed its all-time highs.
This Is What’s Driving The Rally In Bitcoin
There are several factors driving the rally in Bitcoin. Yes, Facebook’s launch of Libra is helping to support prices but no, it isn’t really that important to Bitcoin other than as a sign of growing acceptance of blockchain technology. The two things that are driving Bitcoin’s price higher is next year’s scheduled halving and this summer’s launch of Bakkt physically-settled Bitcoin futures.
The halving is an important event for Bitcoin as it will significantly reduce the number of available tokens. The halving is when the mining reward for Bitcoin is cut in half. After the halving, which occurs next May, each block will only be worth 6.5 Bitcoins. Because the cost of mining will remain the same this means the fundamental value of BTCs all over the world will increase.
Bakkt and its launch of BTC futures are important for two reasons in and of itself. First, physically settled BTC futures will increase the volume of Bitcoin trading and that will aid its liquidity. Second, Bakkt is an SEC-approved trading venue. Now that it is cleared to test its futures products we are one step closer to a BTC ETF. The approval of a BTC ETF will be a game-changing event for Bitcoin.
What we can expect from the price of Bitcoin over the next few months is this. A steady increase in prices punctuated by periodic tests of resistance and minor consolidations. This should continue up to and until BTC reaches its all-time high. Once BTC reaches its all-time high I see a flood of new money come into the market that may push it up to $50,000 within the next two years.
The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets