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Bitcoin lacks bullish momentum to remain stable around the $10500 range
Bitcoin’s price movement has created major concerns among investors, as analysts and traders widely expect that it will see a downturn in the near term. This fear appears clearly if we look at bitcoin financing rates which are very negative at the moment.
Much of the investor’s concern boils down to weakness based on recent news, as well as negative developments surrounding the BitMEX platform, along with overall instability in the traditional markets pushing Bitcoin to the downside.
However, the strength of the assets in the face of these developments is a positive sign that may indicate that an uptrend is imminent.
During yesterday’s trading, Bitcoin failed to keep gains and surpassed the resistance level of $ 10800 and began to decline again to reach below $ 10,500, but quickly bounced back to trade above $ 10600, but it is still at risk of more losses, as the currency lacks Bullish momentum.
Bitcoin has spent the past few weeks in a consolidation pattern after hitting highs of $ 12,500, while the short-term price outlook seems disappointing to analysts, but others say network fundamentals and long-term behavior are as bullish as ever.
As of October 1, 2020, Bitcoin has closed above the $ 10,000 price range for 66 consecutive days, the last time the coin had seen the price stay above $ 10,000 in a row was on December 1, 2017, when it hit a 62-year record line.
Bitcoin overall trend remains positive
Since the currency reached its peak in late August, its price has witnessed a strong decline that has pushed it down to $ 9,800, at its worst, bitcoin trading down more than 21% from its high for this year.
Despite this short-term weakness, analysts remain convinced that the long-term trend for the cryptocurrency is still positive.
One bitcoin analyst reported that the leading cryptocurrency is still on the verge of becoming “the future”, pointing to a series of macroeconomic trends that reflect that while the cryptocurrency may be weak in terms of its price, its intrinsic value increases as traditional economies appear weak.
He adds that macroeconomic trends and geopolitical tensions show that the need for Bitcoin is greater than ever.
The US is currently at a point in time when it needs to continue printing money en masse due to macroeconomic trends, leading to a potential dollar shortage worldwide, which may explain why there are no “real” inflationary trends yet.
It also lives in this stalemate as a result of the inability to let the stock market plummet and the harmful effects of lower interest rates on the economy and many other trends.
Bitcoin is a natural solution in a world where fiat money is constantly being weakened by central players.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.