On October 22, the price of Bitcoin (BTC) entered what some traders anticipate as a “consolidation phase” as investors take profits after the sustained price rally that began on October 1 and saw BTC increase by 55% in three weeks.
Data from Cointelegraph Markets Pro and TradingView shows that the midday sell-off on Friday drove Bitcoin price down from the $63,300 support to the $60,000 level.
Here’s what market analysts are saying about the current price action of Bitcoin in the short term.
“Bitcoin Could Be Ready For Another Step Higher”
The current price action is seen as a welcome development by crypto market intelligence firm Decentrader, which has suggested that “Bitcoin is likely to move higher during the fourth quarter of 2021” thanks in large part to the launch of the ProShares Bitcoin Strategy ETF (BITO) and Valkyrie Bitcoin Strategy Fund (BTF).
In response to concerns about a BTC peak, Decentrader notes the history of new all-time highs and highlights the fact that “there are no cases of bitcoin breaking all-time highs and failing to continue higher.”
According to the company’s analysis, bitcoin’s current fractal pattern indicates “the next major stop for bitcoin’s rally will be $72,000 if momentum can be maintained, after which the 1.618 extensions suggest that around $88,000 will be a significant target.”
The sudden rise in derivatives funding seen over the past couple of days has “reset towards more balanced levels” with open interest remaining in line with the upside, which Decentrader suggested helps reduce the risks of a downward correction.
For analysts, “the weekend rally higher is likely to be met with initial resistance at $65,000, which is a 61.8% retracement from $66,800 and a higher range value area.”
“Price is at a critical pivot point at the time of writing – corrections towards $50,000, we are considering buying opportunities and higher prices in lower funding coupled with increased open interest which suggests Bitcoin could be ready for another rally.”
BTC is on its way to trade like gold
One common comparison that financial analysts make is how the release of a Bitcoin ETF compares to the release of the first gold ETF.
According to Bloomberg Intelligence, “Strong inflows of the new ProShares Bitcoin Strategy ETF show pent-up demand and quantitative traders targeting arbitrage opportunities, which are likely to narrow price spreads and squeeze volatility.”
Bloomberg Intelligence said:
“We see BTC on its way to trading like gold.”
Related: Analysts Hold $250,000 in Bitcoin Even as Bitcoin Drops Below $60,000
Short term decline between $56,000 and $59,000
Cointelegraph contributor Michael van de Poppe provides an insight into what might come next for BTC in the short term, and has published the following chart outlining the lower support area to watch for a good point of return.
According to van de Poppe, the $64,000 area was a “critical level” for the price to break above it, which it failed to do, and “so there is a corrective move taking place.”
“In general, looking at $56,000 to $59,000 is a good location to buy.”
The total cryptocurrency market capitalization now stands at $2.518 trillion and the bitcoin dominance rate is 45.5%.
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