2020-7-27 11:08 |
Bitcoin jumped above the $10,000-level on Sunday for the first time in almost two months. The rally appeared as falling yields on US bonds lifted demand for safe-haven assets. Nevertheless, some analysts, including gold bull Peter Schiff, expect Bitcoin to correct below $10,000 in the coming sessions.
Bitcoin broke above $10,000 on Sunday after consolidating inside a sideways range for almost two months.
The benchmark cryptocurrency rallied 8.19 percent in a three-day winning streak, hitting $10,333 as of Monday. Market analysts, including veteran trader Jonny Moe, noted that BTC/USD could extend its move towards or beyond $10,500, a level it previously tested for a breakout in June and February but failed at achieving it.
FundamentalsBut catalysts are different this time. Bitcoin’s latest rally appeared as the US dollar plunged to its two-year low against a basket of national currencies. In turn, the greenback fell under the influence of plunging Treasury yields as the Federal Reserve maintained its benchmark lending rate near zero.
Gold, a rival haven asset, jumped towards its all-time high on similar hedging sentiments. Mr. Moe pitted the precious metal’s record rally against Bitcoin’s breakout move, calling it a sign of the cryptocurrency’s extended bullish momentum.
#Gold $GC $GLD hit a new all time high in the last few hours, surpassing the 2011 high after nearly a decade.
This is certainly not a bad thing for $BTC. pic.twitter.com/lBWPvvU9Hn
— Jonny Moe (@JonnyMoeTrades) July 27, 2020
But even a flurry of positive fundamentals failed to convince some analysts about an extended price rally. They include hardcore gold bull Peter Schiff and crypto-focused investment portal Phi Deltalytics.
Bad HistoryPeter Schiff, the CEO/c0-founder of Euro Pacific Capital, expects Bitcoin to drop wildly in the coming session. He explained that the cryptocurrency failed to extend or hold its bullish bias above $10,000 across the last 12 months.
In October 2019, for instance, the BTC/USD plunged 38 percent right after breaking $10K. The same happened in February 2020 and May 2020 as the pair corrected by 63 percent and 15 percent upon hitting the six-figure region.
“It’s above $10,000 again today. How big will the next drop be,” questioned Mr. Schiff.
Bitcoin faces extreme selling pressure near the black horizontal line. Source: TradingView.com
The gold bull’s comments highlighted a lower buying demand for Bitcoin above $10,000, as Bitcoinist discussed in one of its earlier articles. Traders typically liquidate their bullish positions near the said level to secure short-term profits, a sentiment that keeps the potential buyers away.
CME Bitcoin Futures GapWhat Mr. Schiff predicted for Bitcoin may come true owing to an almost-accurate technical indicator. On its way up during the weekend trading session, the Bitcoin market left a massive gap in its daily Chicago Mercantile Exchange’s futures chart.
Bitcoin Futures gap at $9,665-9,225. Source: TradingView.com
Historically, traders tend to fill the CME Bitcoin Futures gaps. The chart above illustrates many examples wherein the price has reversed from its uptrend/downtrend to fill the missing candles formed during weekend sessions.
Strategists at Phi Deltalytics agreed with the possibility of Bitcoin breaking below $10,000 to fill the said futures gap at $9,665-9,225. It also added that institutional activity on CME is also not showing indecisiveness about a clear trend ahead.
“There are no clear signs of bullishness for the coming months,” noted the strategists.
Bitcoin was trading 1.10 percent lower from its intraday high at $10,333 as of 0753 UTC.
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