A Generational Bottom May Be in For Bitcoin at $6,500 as Traders Expect Big Rally
- Bitcoin price strongly defended a key support dating back to 2015.
- It rose by more than $1,000 in 24 hours, marking a potential generational bottom.
- Positive sentiment can be carried over to early 2020, unlike late 2018.
The bitcoin price has strongly recovered after testing the $6,400 support level. Following a $1,000 increase, a “generational bottom” for BTC could be in.
Subsequent to an intense short squeeze on Dec. 18, traders are anticipating an extended bull run as BTC looks to test higher resistance levels.
Traders on alert as bitcoin sentiment spikes overnight
Peter Brandt, a prominent trader and best-selling author, said that bitcoin defended an important support level.
Bitcoin was initially testing a linear line dating back to 2015 and technical analysts warned that a break below it could result in a catastrophic downside movement.
During the past four years, the bitcoin price has been moving in line with a parabolic and linear range. In recent weeks, it came close to breaching the two ranges completely.
A clean break below it could have led BTC to test much lower support levels in the $5,000 region, which could have triggered miner capitulation.
Where does bitcoin go from here?
Following the successful recovery, bitcoin is on track to end 2019 with a gain of 100%.
Off of a two-fold upsurge heading into a block reward halving, bitcoin is in an ideal position to maintain upward momentum throughout the first three months of 2020. At current price levels, bitcoin would allow miners to maintain profitability after risking full capitulation earlier this month.
One big variable
The one major variable that could influence bitcoin and the broader cryptocurrency market is the potential sell-off of nearly $100 million worth of Ethereum by a well-documented Chinese scam.
Ethereum and other major cryptocurrencies rarely affect the price trend of bitcoin. But if a significant sell-off triggers a large dump of Ethereum, it could dwindle the momentum of BTC in the short-term.
According to Chainanalysis:
Nonetheless, we’ve tracked roughly 800,000 ETH and 45,000 BTC we can definitively say the scammers transferred to their own addresses to launder. They’ve cashed out at least 10,000 of that initial 800,000 ETH, while the other 790,000 has been sitting untouched in a single Ethereum wallet for months.
Throughout December, it will be crucial for bitcoin to not break below the $6,500 level even if it ends up retesting it. As long as this level is strongly defended, positive sentiment is likely to be extended into the first quarter of 2020.
This article was edited by Sam Bourgi.