Just hours after our last market update, Bitcoin has topped $10,000. This is the first time the cryptocurrency has done this in over seven weeks.
After holding $9,400 for all of Wednesday, the cryptocurrency surged higher over the past few hours, passing resistance after resistance in the $9,000s, culminating in the surge past $10,000 just minutes ago.
Chart from TradingView.com
This latest move may not be that notable in percentage terms but analysts say it’s important from a technical standpoint. One trader, in fact, commented that once Bitcoin decisively clears past $9,500, he doesn’t see “much stopping us” until $10,500.
Bitcoin Is Readying for More Upside
While there remain bears, the majority of analysts believe that Bitcoin is on track to rally in the short to medium term.
A top trader indicated yesterday that there’s a good chance BTC could hit $10,700 in the coming week. As to why the trader, who called Bitcoin’s 2018 bottom six months in advance, thinks this is the case, he explained:
“I might be wrong but something that’s been bugging me is how some of the stronger altcoins like ADA/USD ook mad bullish but ADA/BTC looks like trash, so I kind of feel BTC is going to go on a face melting move soon.”
To corroborate this, the MACD, Parabolic SAR, and moving averages have all signaled that bulls have strength on a weekly timeframe.
Whales seem to be preparing for more upside as well.
Citing data from Glassnode, Willy Woo on May 5th noted that the population of large Bitcoin holders (1,000+ coins) has increased strongly since January’s lows. This indicates these users have been in “solid accumulation mode,” which is a “macro bullish” trend:
“Whale population spotted increasing in the wild. They’ve been in solid accumulation mode since January unperturbed by the COVID crash. This is macro bullish,” Woo said in reference to the chart below.
#whalebreedingseason Whale population spotted increasing in the wild. They’ve been in solid accumulation mode since January unperturbed by the COVID crash. This is macro bullish.
Whales are entities holding 1000 BTC+, data by @glassnode pic.twitter.com/6HLFapIfNe
— Willy Woo (@woonomic) May 6, 2020
Related Reading: Bitcoin Whales Have Been Buying En-Masse Since Early-2020: “Macro Bullish” Sign
There’s a Risk of a Post-Halving Crash
Although Bitcoin is ripping higher, some fear that there will be a post halving crash.
Speaking to Bloomberg, Christel Quek, chief commercial officer and co-founder at Bolt Global, remarked on the chance of BTC falling after the halving:
“This is an unprecedented time as liquidity remains a priority for investors fleeing equity markets. Therefore, while Bitcoin should rise into $10,000s after the halving, it could be followed with a price drop as investors engage in profit taking. No level of technical support can stand when the economy is drained.”
Meltem Demirors, CSO of crypto research firm and investment fund CoinShares, echoed this skepticism. She proposed that we will get a classic “buy the rumor, sell the news” event, whereas prices will drop as halving subsides.
This lines up with the concept of “miner capitulation,” which suggests that drops in the profitability of miners cause sell-offs in the BTC prices.
An analyst explained in a Twitter thread last year that when smaller, non-industrial mining operations “get backed into a corner,” they’re forced to liquidate the coins they earn via mining.
They liquidate their coins, often all at once, to keep the lights on, cash out, or to upgrade their systems for the future:
“Undercapitalized miners panic sell, price dumps, longs get squeezed, stop losses cascade — then more miners lose their lunch.”
Featured Image from Unsplash
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Author: Nick Chong