- BTC/USD has extended the downside correction during early Asian hours; $10,000 still intact.
- Former Coinbase CTO believes that Bitcoin’s growth is now more probable than ever.
Bitcoin has been losing ground since Thursday amid technical correction as bulls stumbled upon a stiff resistance created by $10,500. At the time of writing, BTC/USD is changing hands at $10,120, down 2% on a day-to-day basis. With the total market capitalization of $184 billion BTC controls 61.9% of the market.
Bitcoin virus is out
Despite the retreat, BTC/USD has finished three consecutive days above $10,000. Cryptocurrency industry experts believe that a sustainable move above this psychological level creates a favorable technical setup for an exponential growth towards all-time high and beyond.
An angel investor and a former chief technical officer of Coinbase, Balaji S. Srinivasan, compared Bitcoin price increase to the spread of coronavirus. He wrote on his Twitter account:
In 2009, it was unlikely that BTC would cross $100k. But conditional on BTC having *already crossed* $10k, it was more likely to cross $100k. On Dec 1, 2019 it was unlikely the virus would cross 100k cases. But having *accelerated* past 10k, it was more likely to cross 100k.
He further explained that price movements and the dynamic of illness cases are often modeled as stochastic processes, which makes the comparison viable. Considering that the history never repeats, the practical utility of these models is limited, but they allow to define probabilities that can be further used “to hedge against various outcomes”.
BTC/USD: Technical picture is bullish in the long-run
On a daily chart, BTC/USD stays above 50% Fibo retracement for the downside move from July 2019 high to December 2020 low. This area helped to stop the sell-off on Thursday, and it has the potential to limit the correction on Friday. If this support is broken, the sell-off may be extended towards psychological $10,000, reinforced by SMA50 4-hour. A cluster of stop-orders located around this area is likely to create a protective buffer for BTC ahead of the weekend. Meanwhile, the critical support comes at $9,600, which is an upper boundary of the broken consolidation channel. reinforced by SMA100 4-hour.
On the upside, a sustainable move above $10,300 will improve the short-term technical picture and bring $10,500 back into focus. This resistance coincides with the recent high and separates us from the next psychological barrier created by $11,000.
Downward-looking RSI on the daily chart implies that BTC may extend the correction; however, in the long-run, the bullish trend is still intact.