The Bitcoin (BTC) price has been testing the $10,000 mark over and over again. Does it mean that it has a good chance to reach its last summer’s highs of above $12,000?
In February 2020, Bitcoin has been moving higher quite strongly. The market pushed over $10,500, then sold off to $9,600. Is it just a retracement or the end of a trend? Let us take a closer look at Bitcoin price analysis and watch a short video by Capital.com market strategist David Jones.
Bitcoin price analysis: a short video guide to trade BTC
Bitcoin (BTC) price analysis: does the upward Bitcoin price trend continue?
Bitcoin investors can be divided into 2 major types. Those who will never sell their Bitcoins until the BTC price climbs up to $20,000, $50,000, $100,000, so-called hodlers. And those who use it daily as any other trading asset.
Traders who consider Bitcoin as a highly volatile and at the same time a highly attractive instrument, analyse even the slightest Bitcoin price movements, which can result in some profitable trades.
Trade Bitcoin to US Dollar - BTC/USD CFD
At the end of the business week on Friday February 21, 2020, Bitcoin’s price movement held strong support level, while analysts and traders believed in new yields and new highs after the weekend. Still, Bitcoin’s likely next movement remains unclear.
We have been observing a rising Bitcoin price trend since January 2020, when the market broke out from a long downtrend. The most recent BTC price retracement still does not mean that the positive trend is over. According to David Jones, “The current trend is still going, looking for the strength to come in”. The market is expected to push back to $10,500 area, which might become a strong barrier for Bitcoin rising higher.
Let us take a look at some big levels of Bitcoin price technical analysis, traders should watch closely.
Even though Bitcoin’s price is consolidating between $10,300 and $9,580, some key people in the industry believe the bull market for Bitcoin is just getting started.
Binance CEO Changpeng Zhao, for instance, published a tweet about the upcoming Bitcoin halving and the potential market reaction, reminding that both times beforehand BTC skyrocketed.
Some traders share a view that a Bitcoin halving directly influences its price. For example, the first Bitcoin halving occurred in 2012. One year later, Bitcoin climbed its peak, surging nearly 80x. In 2017 the situation repeated, just a year after the second halving in 2016.
The next Bitcoin halving will take place in May 2020. As the result of the halving, the number of generated Bitcoin decreases, which may bring quite an uplift in Bitcoin price again.
Key highlights of Bitcoin analysis in February 2020
BTC and Gold
According to Peter Zimmerman, a senior economist at the Bank of England (BoE), Bitcoin is negatively influenced by the label of “digital gold”. Comparing BTC to gold, people tend to use it as a safe haven and hold it in hopes to see its price surging.
Zimmerman believes that Bitcoin holding is one of the reasons why BTC would never become an established payment method. An excerpt from his working paper reads the following:
BTC and Corona
There is also speculation caused by Coronavirus, as we see some safe haven assets like gold appreciating. It seems like Bitcoin’s year-to-date 35 per cent gain also correlates with the coronavirus outbreak.
With China’s economy weakening and global indices falling on Monday February 25, Bitcoin is seen by some as an effective macro hedge against global uncertainty.
However, crypto market analyst Mati Greenspan believes the correlation between Bitcoin and the coronavirus dip is coincidental. In his comment to CNN.com, the analyst said, “Amazingly, Chinese stocks have already fully recovered from the coronavirus dip. If stocks have scant been affected, it would be a difficult case to try and say that crypto has been noticeably moved by this”.
The Bottom line
Despite all the controversies and different BTC price forecasts for the near future, 2020 will certainly be an important year for Bitcoin. If you are thinking of including Bitcoin in your trading portfolio, do not forget that it is ultra-volatile in its nature.
Stay tuned to the latest crypto market news, which can drive Bitcoin’s price movement. Track the performance of the top-20 cryptocurrencies live and trade Bitcoin CFDs with Capital.com.