The price of Bitcoin (BTC) peaked at $ 13,000 for the first time since June 2019. Optimism about PayPal’s support for cryptocurrency purchases in a short period of time has led to general market sentiment. Right after the PayPal news was announced, Bitcoin rose from $ 12,300 to $ 13,200 at its peak. Although the medium-term outlook for the cryptocurrency market remains positive, analysts do not rule out the possibility of a reversal.
Bitcoin is up 25.5% in 13 days since October 8. Originally, Bitcoin’s growth began with the conversion of profits from altcoins and decentralized financial tokens to BTC. Some industry players, such as Sam Bankman-Freed, CEO of the FTX Derivatives Exchange, have taken a cautious approach to DeFi tokens, admitting that they set Yearn.Finance at 200, which is equivalent to about $ 2.75 million. While the shorts probably did not hold DeFi back, they showed that the feeling around DeFi is waning.
However, analysts are a bit skeptical of the short-term trend in the price of Bitcoin. The vast majority of BTC holders make a profit, which can lead to investors withdrawing cash. BTC is also close to $ 14,000, which previously served as the main resistance level for BTC in mid-2019. In June 2019, when BTC hit $ 13,970 on Binance, it quickly fell to $ 10,525 the next day. Over the next 21 days, BTC fell to $ 9,252, a decrease of 35%.
Is the recession approaching profit?
Jay Hirsch, CEO of US trading platform eToro, confirmed to Cointelegraph that the PayPal news is “a very big deal”, as well-known investors and venture capitalists, including Social Capital CEO Chamat Palihapitiya, share the same sentiment. The venture capitalist said all major banks “are holding a meeting on how they can support Bitcoin.”
The cryptocurrency market has been particularly bullish about PayPal’s opportunities for cryptocurrency integration for two main reasons. First, Bitcoin support comes from another major payment group, Square. Secondly, it confirms the perception of cryptocurrency as a class of fixed assets. Despite the positive sentiment of the news, according to Hirsch, there may be a decline in the short term, followed by a persistent meeting:
– This increased adoption will probably increase prices, but I think it is too early to understand the effect of this announcement on the markets, and we will not be surprised to see a profit that takes prices in the short term before. they begin to grow slowly and steadily. ”
Denis Vinokurov, head of research at the cryptocurrency exchange and broker Bequant, believes that consolidation in the short term will at least lead to a healthier trend for BTC, rather than exponential growth. There is little resistance between $ 14,000 and $ 20,000 because the previous bull cycle in 2017 ended abruptly. But Vinokurov said that does not mean that it will ever be easy to reach a new height.
Glassnode researchers report that when 98% of Bitcoin games are profitable, the profit phase is inevitable. Whether new flows into the bitcoin market will offset the gains from existing and dishonest investors is a variable in the near future. Thus, the current flow of exchange rates will be a closely linked statistic that has recently fallen to an annual low. According to Vinokurov, if currency flows begin to grow again, this means that profits are possible. he added:
“Overall, the markets are moving towards a region that does not offer great opportunities for price discovery, but for healthy markets one can expect consolidation instead of increased traffic in one direction.”
It is very likely that BTC will continue its continuous rally after a short period of consolidation, according to Skew, all bitcoin markets, including spot, derivatives and options, are in high demand for the PayPal news. Skewed analysts said, “Bitcoin has shown some significant activity after PayPal’s news about futures, futures and options. Excellent sessions. ”
The next bitcoin area in the medium term?
If Bitcoin sees a decline and consolidation in profits, analysts expect that the next BTC area will form between $ 12,500 and $ 13,500 and remain there for the next few months until the next breakout. The $ 12,500 mark is important because it acts as strong resistance and confirms that Bitcoin remains above it as a stronger support area. The $ 13,500 to $ 14,000 zone was a tough, multi-year resistance zone.
But a narrow area below the key resistance level that has pushed BTC down for almost four years puts BTC in a positive position and sets a new record at arm’s length, especially when the next breakout occurs.