Bitcoin ongoing downward trend has continued to expand today after the bears pushed the cryptocurrency below the critical support of $ 7000. Many analysts and investors are concerned that more losses are imminent for cryptocurrency.
The support that Bitcoin previously found in the area above $ 6,000 has led some analysts to predict that a relief rally is imminent, but it’s important to note that the medium-term prospects of BTC is still pretty bleak.
BTC price dumped to $6600 area
At the time of writing, Bitcoin is trading down nearly 4% with the current price of $ 6688.
Most analysts previously believed that a break below $ 7,000 would open the door for strong and rapid price movement.
Source: Trading View
Because of the support at $ 6,800 and the continuous trading of sideways movements, analysts are widely noting that BTC may be ready for a decent relief rally.
Analyst “Mayne” correctly noted in a recent tweet that he believes the cryptocurrency could see a rebound from the region, adding that it could be invalidated if the cryptocurrency drops below. 6,500 dollars.
I think we could see a relief bounce from this area. I am long with a stop at $6500.
Home for the holidays will be posting less over the next 2 weeks. I’ll work in a stream or two for sure.
Happy holidays! pic.twitter.com/rooXTrRzcY
— Mayne (@Tradermayne) December 16, 2019
Trader “HornHairs” concurs with Mayne’s assessment, noted that he is paying attention to an upward movement to the CME Bitcoin Futures gap at $ 7,200 in the near future.
Although the short-term outlook is a bit bright, it is important to note that the market structure on larger time frames is still definitely bearish. Trader “TraderXO” recently talked about this potential price drop, explaining that BTC could soon see the movement drop to a significantly lower level, with the medium-term goal set in the $ 5,000 area.
$BTC – And so it begins…
Almost confirms what I believed to be preliminary support
The only question is… will we see the phase of ‘selling climax’ (SC) & how deep does it drop…
I’m personally under the impression this could drop to the 200 weekly MA. pic.twitter.com/hmkyNZmYhW
— TraderXO (@TraderX0X0) December 16, 2019
Bitcoin is undervalued
The world of tech companies today is dominated by names like Amazon, Google, Facebook, Cisco and a group of others. However, some of these companies have faced a collapse of near 99% in value in their time – but people still say Bitcoin is an unnecessary risk.
Bitcoin’s volatility has become well known both inside and outside the cryptocurrency space. Its rise from $ 1,000 to $ 20,000 in 2017 and then to the nearly 85% collapse that critics called Bitcoin a ‘mother of all scams’.
However, through the dot com bubble of the early 2000s, there were big companies like Amazon, Cisco and Yahoo, which dropped 98.7% of their stock value in less than two years. Perhaps, instead of seeing Bitcoin as a volatile anomaly, it’s time to start treating it as another lesson in technology adoption.
Looking at Amazon today, the company has a valuation of over a trillion dollars and stock’s price is $ 1,790. Incredibly, the company once saw its stock drop from $ 75.25 to just over $ 5.
Riggs macro economist pointed out that in the tech space, volatility is part of the game.
Many people try to talk negatively about Bitcoin volatility, meanwhile Amazon, Yahoo, and Priceline all COLLAPSED over 96% back in 2000 before minting millionaires.
Early tech volatility is natural. Long term upwards volatility is the holy grail.
Get used to it. pic.twitter.com/JuCWMd1RKA
— Riggs (@RiggsBTC) December 15, 2019
What’s even more amazing is that companies like Amazon, Yahoo and Cisco continue to thrive after this decline.
Although Bitcoin is volatile in part due to low liquidity, it is still an indispensable high-potential digital asset in any modern portfolio. In addition, despite a 75% decline by the end of winter 2018, BTC has recovered spectacularly in 2019.
Bitcoin has the support of the community and has grown not only as a medium of exchange but also as a store of value. As a shield in economic crises or political instability, the network is censorship capable but still transparent enough.
The main value proposition of the Bitcoin network is the high level of decentralization. It cannot be shut off easily due to investing in space. The Proof of Work consensus algorithm means that miners use electricity, a utility that is not cheap.
Although Bitcoin cannot be used for other purposes such as gold, it would be much better to hold it for its advantage compared to fiat despite its feasibility as Mark Cuban argues.
Amazon’s market capitalization (887.804B) is 7.4x that of Bitcoin (120.480B). Moving forward HODLers certainly benefits. If the adoption of Bitcoin increases, it is likely that BTC will be undervalued at the spot rate. Time will give us the answer.
Amazon’s AMZN price and market cap. Source: finance.yahoo
If you think you’ve missed bitcoin’s biggest price increase, think again. The Winklevoss twins believed that bitcoin will increase much more and still be undervalued if the market capitalization is below the $ 7 trillion threshold (BTC’s current market capitalization is $ 229 billion).
“We think Bitcoin is 2.0 gold and so until it reaches a market cap of $ 7 trillion (the size of the gold market) it is still a very undervalued asset.”
Not only did the Winklevoss couple think that BTC was undervalued. Brian Kelly, CEO of digital investment firm BKCM LLC is an optimist about cryptocurrencies. As an experienced analyst, he said there was reason to believe that Bitcoin was undervalued by 50% and that although prices could fall, the scary bear market was over.
Besides, Tom Lee, global consultant of Fundstrat, a Bitcoin bull is still more optimistic about the price than ever. Lee thought that BTC is an asset and being accepted by a significant number of consumers will push the price up. According to him, bitcoin wallets only access 7% of Visa’s 4.5 billion account holders, the fair value will be $ 150,000 per Bitcoin.
An earlier report in April by Adamant Capital showed that the smart money represented by BTC whales is in the “accumulation” phase. This problem reflects the “final stage of the bear market”. Now is the right time to buy Bitcoin. Once the BTC bulls strengthen their restraint, the price of bitcoin will skyrocket.
Based on “the highs and lows in the history of bitcoin, we have returned to the undervalued region.”
Source: Adamant Capital
Read more:
- Bitcoin Price Bottomed Out A Year Ago But Maybe Will Return If BTC Fails Break Out Of The Low-$7000s
- Glassnode Research: Most BTC Investors Are Still Confident Hodl Bitcoin