- The approval of a Bitcoin ETF will see fresh influx of money from traditional and institutional investors.
- Bitcoin recently broke out of a long-term descending channel.
The just concluded was referred to as the year of correction in the cryptocurrency market. Digital assets led by Bitcoin trimmed most of the gains accrued towards the end of 2017 and early 2018. Moreover, the market value declined significantly by more than $700 billion to the current $129 billion. In addition to that, Bitcoin formed new 2018 lows after it broke below the major support areas at $6,000 and $5,000 respectively.
The new year has dawned up us we expect the coins and altcoins will make a correction to the upside. There are various factors that are believed to be the main driving forces for the impending bullish reversal. For instance, the approval of a Bitcoin exchange-traded fund (ETF) will see fresh influx of money from traditional and institutional investors. Improvement of the regulation environment will also increase confidence in the market. Another factor is mass adoption; this is directly linked to Bitcoin gaining more real world use cases.
Meanwhile, Bitcoin is trading at $3,789 after being rejected at $3,800 during the new year’s brief recovery. The asset is slightly in the red and correcting lower 0.87% on Wednesday 2. Bitcoin is not the only asset in the red, for example apart from Ethereum (ETH) and IOTA (MIOTA) which are trading slightly in the green with gains of 3% and 0.17% respectively.
Bitcoin recently broke out of a long-term descending channel. This move reversed the bear trend that had been dominating the market for a while now. While the retracement made it above $4,000, buyers lacked the power to keep the price above this level paving the way for a bear correction that recently tested $3,650.
The moving averages (50 SMA and the 100 SMA) playing catch up to the price which is making a weak bullish move with $3,800 in sight. The confluence detector provided by FXStreet shows that slightly above the current value is the initial hurdle at $3,837.73 If the price makes it above this level, BTC/USD will face another weak seller concentration at $3,916.33. A break above $4,000 is possible as long as the buyers can sustain the price above $3,800. However, Bitcoin will hit a wall at $4,270.02, a region that will also work as a breakout point towards $4,500 and eventually $5,000.
On the other hand, a support is highlighted at $3,719.83 while a second support area is available at $3,562.63. If the losses extended below this zone, Bitcoin will be on the breach of tumbling to $3,000 but before that there will a support at $3,405.44.
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