Is It Correction Time for Bitcoin?
By: Ivy Riane
Tags: Sentiment, Finance, Cryptocurrency, Bitcoin, Investing

Photo by Giovanni Calia on Unsplash

Bitcoin reached all time highs this week by crashing through the $10,000 mark and heading straight past $11,000 to finally land with a closing of $11,831 on Sunday. Bitcoin has had a crazy ride this year but are we finally going to see the correction that many cryptocurrency experts have been eyeing for the past month or so?

CoinMarketCap has reported that Bitcoin (BTC) is up about 18 percent week over week and has been gaining about 50 percent on a monthly basis, on average. Bull market tendencies are still in place but the failure of Bitcoin to close above the previous record high ($11,500) might indicate that the bull market has exhausted itself, even if temporarily.

Many Bitcoin experts are claiming that we will soon see a short-term pullback on price but some are skeptical with recent announcements of Bitcoin Futures coming to the market later this month.

Why may we be looking at a pullback?

· The previous record high for Bitcoin was $11,500. While Bitcoin has temporarily gone back up to $11,600, it has been unable to maintain a position above that high.

· Look at yesterday’s candle at the gap between the midday high and daily close, this could indicate bullish exhaustion.

· The trading volume between last week and this week is vastly different, last week was much higher. Trading volume is important to maintaining these highs that have presented themselves recently.

· Overbought conditions could be indicated by the RSI (Relative Strength Index).

Overall, the charts still seem to indicate that the market is bullish, so any pullbacks will more than likely be short lived. If the market does end up pulling back soon, it is likely that a fall will land about $10,000. A brief look at the historical trends over the past few months will show support for this idea.

Photo by Evan Dennis on Unsplash

The $10,000 psychological support level being broken through after toying with it for quite a while was a major breakthrough for the cryptocurrency economy and it is unlikely that a fall will happen too far downward from this milestone. Ascending trendlines drawn from the past two Wednesdays seem to support this theory with support landing around $9,900.

Positive news is that a quick look at the five and ten day moving average seem to show an upward slope, so more support here for the thought behind a short-term pullback to only about $10,000.

Keep an eye on the trends at the end of the day today and the next few days to monitor for signs of a trend reversal that could indicate that there is a pullback happening or impending.

Many new investors have joined the market lately thanks in part to an increase in mass media coverage and many outspoken voices of Bitcoin and cryptocurrency becoming more mainstream or widely accepted by more members of the press. One such voice is Mike Novogratz, billionaire hedge fund investor, who has stated that a conservative estimate for the growth of Bitcoin by the end of next year could be as high as $40,000-$50,000!

Disclosure: This blog post is for educational and informational purposes only and is based upon my individual experience. Please do your own research and do not invest any money that you cannot afford to lose. Consult with attorneys and tax professionals for any legal or tax related questions that you may have. This should not be considered to be investing, legal, or tax advice.