- Summary:
- Bitcoin price rejected at $12,000 but the bias remains bullish. Looking for new highs as long as the series of higher lows remains in place.
Bitcoin price declined yesterday, following the general market bearish tone. Stocks, gold, or silver, also had a bad day, triggering gains for the USD across the board.
For Bitcoin price, yesterday’s correlation with gold comes at a time when many look for diversification into digital assets. Therefore, if Bitcoin price turns higher while gold price falls or consolidates, it is a sign of a mature cryptocurrency market.
Bitcoin Acting Like a Technology Stock
An interesting point was raised yesterday about Bitcoin acting similarly to U.S. tech stocks. Coinshares, a digital assets management firm based in London, the United Kingdom, argues that, just like a tech stock, Bitcoin is in the growth phase. Therefore, the management firm recommends investors building a 4% stake in their portfolios dedicated to Bitcoin.
But on the other hand, this would increase a portfolio’s exposure and reduce diversification. If Bitcoin price reacts together with the general market, following the classic risk-on/risk-off pattern, then any diversification benefits are lost.
Bitcoin Price Technical Analysis
A quick look at Bitcoin price evolution during the pandemic and the bullish trend is obvious. It consolidated for a while before fully retracing the March move lower and now struggles at the $12,000.
However, the bias remains bullish. For as long as the market continues to make higher highs and higher lows, investors should buy the dip.
At this point, Bitcoin price hesitated twice at the $12,000 level. Some will even call it a double top and try to sell. However, for a double top to be in place, the price must break the series of higher lows. For the time being, it did not have the power to do so. Hence, the bias remains bullish.
To trade a possible leg to the upside, conservative traders may want to wait for the market to close above the critical $12,000. Next, place a stop-loss at the lowest point in the consolidation area ($11,300) and set the target following a 1:3 risk-reward ratio.
Bitcoin Price Forecast
