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Analysts believe that BTC will show a "slow bull" trend in the next year, but it will definitely undergo multiple adjustments in the middle.
According to HOLD market data, on June 27, BTC broke through $14,000 and reached its recent high before it began to fluctuate and fall. On the morning of July 2, the price of BTC/USDT on Huobi fell below the 10,000 USDT mark and is now at 9,870 USDT, a 24-hour drop of 4.99%.
Image from Huobi Global official website
After BTC broke through $10,000 and became a hot topic on Weibo some time ago, BTC’s fall below $10,000 has become a hot topic on Weibo again. Many Weibo users also commented on BTC’s fall below $10,000.
Some people are even less optimistic about BTC because of this big drop: "Friends were still making great strides a few days ago, but now it's a bit embarrassing. Let's return to the real economy. Although it is conservative, it is still practical." "It has been fluctuating up and down, so it should be renamed as an elevator coin." There are also some voices that are still optimistic about BTC: "It didn't fall below the price at all. The air force deliberately took advantage of Sina Weibo to short sell. The price fell below the price at just a small US exchange."
What more people are concerned about is why the price has fallen again? Should they get on board? How long will the price fall?
BTC declines and is suspected to be a correction
As for the reason for this sharp drop, most analysts believe that BTC is pulling back for consolidation.
Bao Daren, a special analyst at Huobi.com, told Odaily Planet Daily that Bitcoin experienced a rapid acceleration in late June, breaking through the $10,000 mark and reaching the annual resistance of 13488. The rise above $10,000 was mainly caused by hot speculation, so the rise could not be sustained for a long time. In addition, there was a huge amount of locked chips at the annual resistance, and selling pressure became another important inducement for the recent high-level retracement adjustment.
"In addition, from a technical perspective, the strong rally in late June was not fully accumulated. The accumulation of momentum for the breakthrough of important resistance in this round of large-scale doubling reversal is based on monthly units, but the breakthrough of important resistance above 10,000 took only a few days. In terms of technical form, this is similar to the frenzy of breaking through $10,000 to the historical high of $19,876 at the end of 2017. Time is extremely compressed, and it is bound to need to correct the time and space relationship in the form of shock accumulation and trend pause."
"This round of Bitcoin decline is a correction to the previous Bitcoin bull market." OK Research senior researcher Li Lianxuan said. In addition, Li Lianxuan analyzed the reasons for BTC's decline from a technical perspective:
The above picture is the daily chart of Bitcoin. From a technical perspective, the K line in the KDJ indicator (the blue line in the KDJ chart) broke through the D line (the red line in the KDJ chart) at the end of June, forming a "death cross", which has sent a signal of a market decline. At present, the K line and the D line are not below 20, indicating that the market's downward trend has not ended; from the MACD indicator, the MACD line (the blue line in the MACD chart) crossed the signal line (the red line in the MACD chart) downward on the morning of July 1, sending a signal that the market will usher in a big drop, so we observed that the price of Bitcoin fell from US$11,000 to US$10,000 on the evening of July 1. At present, the MACD brush chart (the red and green bar chart in the MACD chart) is still below the 0 line, and there has been no obvious reversal, indicating that the market's decline will continue in the short term until a new reversal signal appears.
Odaily Planet Daily Note: The KDJ indicator, also known as the stochastic indicator, is a fairly novel and practical technical analysis indicator. It was first used for analysis of the futures market, and later was widely used for medium- and short-term trend analysis of the stock market. It is the most commonly used technical analysis tool in the futures and stock markets.
1Token analyst Panda believes that in this round of market, Bitcoin started from 8,000 points and reached a high of 13,900 points, with basically no callback during the period, accumulating a lot of profit. In addition, plustoken's escape has added a haze to the entire cryptocurrency market and hit investor confidence.
"However, as I said last time, we are in the early stage of a bull market. A major feature of the early stage of a bull market is violent ups and downs. The current decline is a normal correction. According to the Fibonacci retracement, it is currently at the 50% position, and the next support level is around 9,600." Panda said.
Token panda COO Shao Yuqi said that BTC’s previous rise was very smooth. If it was the traditional “rise-sideways-rise” pattern, it would have been bullish. However, there were continuous sharp declines last week, and all bullish indicators were destroyed. It would take adjustments at the daily level to re-select the direction, which might take at least two weeks and at most two months.
OKEx Chief Analyst K believes that the recent continuous decline of BTC is a normal correction from the perspective of technical analysis. As we mentioned in our previous analysis, BTC has not experienced a correction of more than 30% since its rise from around $7,000. According to the OKEx BTC quarterly contract quotation, from the high point of 14,460 to yesterday's point of 10,329, the decline is 28.56%, which is lower than the historical lowest correction of 30%.
From the news level, the easing of the Sino-US trade war has caused international safe-haven funds to withdraw from safe-haven assets, such as gold, Japanese yen, and Bitcoin. The stock market has rebounded due to this positive news, resulting in capital reflux and bleeding of safe-haven asset funds. The transfer of funds has caused a decline in the demand for safe-haven assets such as gold and Bitcoin, and the price has fallen. The figure below is a comparison of the daily gold and BTC price trend charts. From the comparison chart, we can clearly see that the recent BTC price trend is extremely similar and synchronized with the gold price trend.
Cao Junliang, CEO of Molecule Group, believes that the fall of BTC below $10,000 this time was due to a correction, and that $9,000 to $10,000 is an important stage for BTC consolidation.
Cai Fei, an analyst at Whale Library, said, "Every time there is a big rise, there is a deep correction, and this depth can blow up most of the bulls..."
Moreover, Cai Fei believes that the current sharp drop is because large institutions are entering the market. "Large institutions are entering the market while the market is being dumped so that they can find some low-priced chips," Cai Fei said.
Cai Fei believes that BTC will fall by about 30%-40% this time, and the next correction is likely to occur in 30 days.
What will be the future trend of BTC?
"From a technical perspective, the daily MACD crosses, the MFI continues to weaken, and the KDJ enters the oversold zone. Now is not a good time to buy the dip. From a longer-term perspective, BTC closed with a long upper shadow last week and traded at a high level. It is expected that 13,900 points will be a high point for a long time in the future," Panda analyzed.
Odaily Planet Daily Note: MFI indicator can also be called money flow indicator. In March 1989, J Welles Wilder's first published the usage of MFI indicator. MFI indicator is actually a modified RSI. RSI is based on transaction price; MFI indicator combines price and volume and takes it into comprehensive consideration. It can be said that MFI indicator is RSI indicator of transaction volume.
Mr. K believes that "it is too early to conclude that this round of bull market has ended. At the current stage, based on the available data and information, it can only be considered a correction after a continuous rise. There is an important support below, and we can pay attention to the OKEx BTC quarterly contract price around 9200, where there will probably be signs of a stop in the decline. Pay attention to the OKEx BTC quarterly contract price around 7461 for the farther support."
"From the daily chart, the current support level is around US$10,000 and the resistance level is around US$12,000," said Li Lianxuan.
Bao Daren analyzed, " Bitcoin prices have entered a short-term adjustment period. The Coin Strategy System has continuously released risk-hedging strategies at high levels. It is expected that July will be a stage of price fluctuations and accumulation, and there will no longer be obvious long-short trends. Support is focused on 8843 and 9936 US dollars, and resistance is focused on 11473 and 12423 US dollars. The quotation is based on Huobi Global Station."
Based on the positive impact of Bitcoin halving in 2020, Cao Junliang is still optimistic about Bitcoin in the long term. In the next year, BTC will show a "slow bull" trend, but it will definitely undergo multiple adjustments in the middle.
Short-term investment advice
"Investment opportunities may be in recent hot current events, such as the lunch that Justin Sun, the founder of TRX and BTT, and Buffett will have this month and next month, and the BTFS decentralized storage system will also release a test network. It is recommended to pay attention." Panda gave investors the above reference suggestions.
"During the adjustment accumulation period, the trend characteristics become invisible, and investment operations are mainly based on small and medium-sized bands. Don't hold on to coins mindlessly, and adjust positions appropriately and flexibly to ensure the safety of the principal and profit chips during the special accumulation period." Mr. Bao advised investors to pay attention to trend changes.
Li Lianxuan's advice to investors is relatively conservative. "In the spot market, it is recommended to be cautious, continue to wait and see, and do not buy for the time being; in the contract market, short selling with low leverage in the short term is recommended."
Cao Junliang's short-term operation advice to investors is not to rush to build a position. BTC will still need to consolidate in the short term. If you split the position, you can try to build a 20%-30% position at more than 9,000. It is recommended not to move around in the medium and long term. 10,000 points is a relatively strong support level, and the next support level is 9,000 US dollars. You can also pay attention to today's daily chart. It is not recommended to enter the market if the daily chart does not stop. Compared with yesterday's daily chart, if today's daily chart hits a new low, investors are not recommended to enter the market.
Source: Daily Planet
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