Bitcoin prices finally closed down on Tuesday of this week. This subsequently brought to an end a record-breaking positive run for the world’s largest cryptocurrency. Does it signal a bitcoin price correction ahead, though?
Bitcoin Price Correction Ahead?
BTC had made gains in each of the previous six consecutive days of trading. That marked a new record streak for this year. It was also the longest period of positive trading in 11 months. The gains had averaged between 2-5% across each of the last six days, representing a significant gain for bitcoin bulls.
However, trading closed on Tuesday slightly down on the day. At the time of press BTC price was trading at $9,098 – only marginally up on the day, and basically flat with starting price. During the run, the cryptocurrency rallied from $8,120 to $9,366, fuelled in part by mounting speculation around Facebook’s forthcoming cryptocurrency.
The fear now for bitcoin investors is that this could be the start of another temporary correction, before bitcoin rallies forward towards renewed highs of $10,000.
According to CoinDesk analyst Omkar Godbole, bitcoin may correct to $8.600 before starting its next rally:
“Bitcoin fell 2.87 percent on Tuesday, ending the longest stretch of daily gains since July 2018. The long-term outlook, however, remains bullish with the 3-day chart calling a move to $10,000.”
“On the way higher, BTC may face resistance at the key Fibonacci retracement level of $9,642. The hourly and 4-hour charts are reporting bearish indicator divergences. As a result, a correction to key support at $8,600 could be seen before a potential rally to $10,000.”
Facebook’s Libra Effect
The hubbub around Facebook’s Libra cryptocurrency has been moving markets in crypto this week. Some mixed reviews have greeted the launch, including some notably strong regulatory pushback. The general consensus view, however, is that the development will be a positive for cryptocurrency in the round, and specifically for BTC prices.
The potential for a pullback is clearly indicated in technical charts. Nevertheless, the underlying momentum in recent weeks suggests BTC could be set for a return to the positive growth trends that have marked out trading in 2019 so far.
Memories of the ‘cryptowinter’ of 2018 are now becoming increasingly distant. Bitcoin bulls will now be hoping markets can keep up the upside pressure over the coming weeks to $10,000 and beyond.