Βitcoin - BTCUSD
Bitcoin price moves without direction while above the $10,000. The lack of conviction either to the upside or to the downside led to consolidation around the round number. In fact, this was one of the major themes for the year so far – the inability of Bitcoin to distinguish itself as a digital alternative investment asset.
Think of the U.S. stock market. The Nasdaq 100 is up on the year, the S&P500 made a new all-time high, and even Dow Jones is almost flat on the year. How about the Bitcoin price? It performed in a similar manner.
An alternative investment diverges from the stock market and then recovers with it. Thus, it protects the investment – just like gold did. Before saying that gold and Bitcoin performances are alike, do not forget that gold broke higher in the summer of 2019 and reached a new all-time high twelve months later. Bitcoin only consolidated in the meantime.
A recent controversy on the Internet puts some pressure on the Bitcoin price. The stock-to-flow pricing model is questioned by some economists, who consider it quite useless.
As a reminder, this is a model developed by an anonymous Twitter user. The model is based on a ratio between the Bitcoin supply and how much it exists in circulation. Critiques argue that the model is based on a faulty comparison and that the scarcity implied is not correctly calculated.
For the entire month of September, Bitcoin simply moved sideways. However, it was rejected from previous support turned resistance. Moreover, dynamic resistance also lies ahead.
Because of that, it moves with a bearish bias. Bears may want to wait until Bitcoin breaks the lower edge of a possible triangle before going short at $10,200 with a stop at $11,500 and a target that follows the 1:2 or a bigger risk-reward ratio.
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