Bitcoin gains 6% in a week; Is it a dead cat bounce?
The price of Bitcoin, Ethereum, and Dogecoin have shot up in the last few days because of positive sentiment regarding Elon Musk buying the Twitter stake. Bitcoin has seen an outflow in the last few months, and many retail investors are also worried about the Proof of Work consensus, especially after the Merge upgrade on Ethereum.
Many experts also treat Bitcoin as an asset instead of questioning its sustainability because the costly mining system makes it a special digital asset. It can be a digital alternative to gold in the long term, so large investors are accumulating Bitcoin at this lower level.
Retail investors were losing interest in Bitcoin; many market experts predicted BTC would hit the $10k level this year. We think BTC will not break $19K support but will consolidate within this range. If you are interested in buying BTC, you must read our Bitcoin prediction before investing.
While writing this post, BTC was trading at $20,277, which is around the resistance level. The BTC price has been consolidating within a range of $19,000 and $20,300.
In the last few days, it has broken the resistance due to positive sentiment in the market. It faced a sudden demand, and the price of Bitcoin shot up. However, this sentiment will not last long, and the price will come down to the level of $19,000 again.
Though the candlesticks are forming in the upper Bollinger Bands, we think it is not an ideal time to buy for the short term. Many people treat BTC as an asset, so you can invest in BTC at any level; however, we think buying near support would be better for the short term.
The BTC price has been consolidating on the long-term chart around the baseline of the Bollinger Bands. On the other hand, MACD and RSI are bullish, but it is not the right time to buy for the long term. The price of Bitcoin may fall to the long-term support, and you can accumulate coins on that level.