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4 reasons why analysts are still bullish on Bitcoin despite the recent 15% drop

Bitcoin price analysis today February 21, 2019

Bitcoin (BTC) has been performing poorly over the past few weeks. The price of the king's coin – since failing before the resistance of $ 10,500, has acted weakly, constantly losing important support levels.

After two weeks of price declines – ending by a sharp three-day losing streak to push Bitcoin from $ 10,000 to a low of $ 8,520, it's no surprise investors once again feared that BTC would back to the discount market.

Still, some analysts are optimistic, offering a range of fundamental and technical reasons to explain why they think Bitcoin will have an upward trajectory in the coming months.

Reason # 1: Macro support was found around $ 8,500

Although Bitcoin has dropped significantly from just a few days ago, it has made a definite bounce at the support of $ 8,500 (as seen in the chart below) and is currently trading at around $ 8,925. when the bulls have entered the 11th hour

This relatively strong recovery has been considered by some analysts to be bullish; At about $ 8,500 there is a confluence of macro support and key technical support, meaning a reversal in this area supports the bullish case.

Filb Filb – a famous cryptocurrency trader and analyst, explained this further when he pointed out 5 major support levels around $ 8,500.

  • The simple 200-day moving average is at $ 8,789
  • The point of control of the whole move is at $ 8,600
  • Fib 50% retracement level
  • The 20 and 50-week moving averages are at $ 8,500
  • Blank space CME

Reason # 2: The deflation shock of Bitcoin halving is only a few months away

Even if Bitcoin doesn't find support at $ 8,500, halving – an event that happens every four years that will see the number of BTC issued on each block be cut in half, is coming very close. ; Current estimates suggest that halving will be activated by May 2020.

PlanB's stock-to-flow pricing model, an anonymous quantitative analyst working for a European organization, shows that scarcity is closely related to the market value of BTC.

Under this model, halving in May will push the Bitcoin price to a reasonable level somewhere around $ 100,000 – 1,000% higher than the current market price of the asset.

It sounds crazy, but PlanB has found that this model is accurate with a R square of 0.9372, which shows the relationship between Bitcoin's scarcity and the market value. Its field is coincidence.

This means that from an arithmetic perspective, if the inflation of BTC decreases and the quantity of demand remains the same or increases, then the price of natural land tends to rise higher.

Reason # 3: Interest from retail investors is increasing

The data shows the growing interest of retail investors in cryptocurrencies – something that has supported Bitcoin's rally from $ 1,000 to $ 20,000 in 2017.

Here are 4 reasons that CryptoSlate has previously identified:

  • The demand for Grayscale's Bitcoin Trust (GBTC) – an easy way for Americans to come into contact with cryptocurrencies, has increased, as evidenced by the volume on the OTC market.
  • Trading volume on Coinbase has skyrocketed in the past two years. Coinbase has long been considered the home of retail investors.
  • Searches for terms like “Buy Bitcoin” and “Bitcoin Halving” on Google have started to trend up.
  • Mainstream media channels are starting to mention cryptocurrency again.

Reason # 4: Central banks continue to prove the value of Bitcoin

From a purely macro fundamental perspective, central banks are continuing to lower policy rates and engage in open market operations.

Many prominent market commentators – from CNBC's Fast Money and the main Financial Times correspondent to cryptocurrency analysts and macro investors, think this trend is easy to emerge, triggered. by low interest rates, that will boost demand for scarce assets, like gold and Bitcoi.

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According to CryptoSlate
Translated by ToiYeuBitcoin

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