Bitcoin’s brief dip just under $10,000 early on February 10th seems to have filled a “gap” that was left in CME futures trading at the end of Friday, according to a new report from CoinTelegraph.
Indeed, futures trading on CME closed Friday at $9,850, almost exactly the level that Bitcoin dropped to earlier today.
The dip below $10,000 may have also fueled a single trader on derivatives platform BitMEX to purchase more than $2 million worth of Bitcoin in a single transaction.
— WhaleTrades 🐳 (@WhaleTrades) February 10, 2020
“The question is if we can quickly reclaim 10k or need to test lower.”
An analyst that goes by the moniker “filbfilb” told CoinTelegraph that while the dip may have spurred some buying action, it could be indicative that the big bull run that so many analysts are pointing toward could be just out of reach: “this was a fairly mild dip. A backtest of the weekend breakout and the CME gap was a high probability,” he said. “The question is if we can quickly reclaim 10k or need to test lower.”
In investing, the term “testing” refers to instances when an asset’s price nears an established support or resistance level set by the market.
A “support level” is a price level where a bearish trend can be expected to break because of a concentration of demand. A “resistance level,” on the other hand, is formed at the level that an uptrend is expected to pause due to an abundance of supply (and corresponding lack of demand.)
At press time, BTC had fallen just below $10,000 to approximately $9,970, which could indicate that there is not enough demand to maintain the $10,000 resistance level.
Analysts seem to believe that this price run is “different”
Still, the crypto community seems to see a bright future ahead for BTC.
In an email to Finance Magnates, Simon Peters, analyst, and cryptoasset expert at multiasset investment platform, eToro, said that the latest price run could be fueled in part by global events such as the coronavirus crisis.
“There clearly seems to be more interest in bitcoin and other crytpoassets as potential safe havens for investors worried by the volatility of the stock markets as the coronavirus crisis continues,” he said. “Gold, another safe-haven investment, has also enjoyed a bump in value recently.”
On the other hand, however, “other commentators point to previous trends for bitcoin, suggesting the cryptoasset is due for another bull run.”
“It is a crucial period in the run up to bitcoin block reward halving in May,” Peters said. Despite falling back slightly overnight, if the price stays at around $10K, it is likely to give investors confidence and stoke increased buying activity.”
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Indeed, a number of analysts are saying that this bull run is the “real deal.”
Willy Woo, a renowned cryptocurrency analyst and partner at Adaptive Fund, tweeted that “Fundamental investment activity is backing this $10k breakout.”
This breakout is the real deal. Fundamental investment activity is backing this $10k breakout. pic.twitter.com/IDWmhXX2Mj
— Willy Woo (@woonomic) February 9, 2020
Brian Armstrong, chief executive of US-based cryptocurrency trading platform Coinbase, said on Twitter that he sees Bitcoin’s push past $10,000 as “real progress”:
Excited to see #Bitcoin back above $10k. Real progress continues to happen, independent of irrational exuberance or dispair. Ignore short term thinking and haters. You can use technology to improve the world, it just takes a lot of time and hard work.
— Brian Armstrong (@brian_armstrong) February 9, 2020
Thomas Lee, Managing Partner and the Head of Research at Fundstrat Global Advisors, wrote that it’s a “good sign that #bitcoin is up 40% in the first months of 2020.”
Good sign that #bitcoin is up 40% in the first months of 2020
— Thomas Lee (@fundstrat) February 9, 2020
What are your thoughts on the price run? Let us know in the comments below.