Bitcoin Weekly Forecast: Bitcoin bulls piggy-back on altcoins rally

  • Bitcoin has gained ground amid massive altcoins rally this week.
  • Bitcoin SV and Dash are the winners of the week with over 100% of growth.
  • Bitcoin bulls need to engineer a sustainable break above $9,000.

This week was marked by a strong altcoins rally on the cryptocurrency markets. Bitcoin SV (BSV) and Dash experienced the sharpest price increase over 100% in recent seven days and contributed to the bullish sentiments on the market as a whole. The total value of all digital assets in circulation jumped to $243 billion, while Bitcoin’s market dominance retreated to 66.2%. Bitcoin (BTC) broke free from the wedge on Wednesday, January 15 and attempted to move above $9,000. However, after a false breakthrough, the first cryptocurrency retreated to $8,800. Bitcoin has gained 12% in recent seven days, though the further upside may be limited as long as $9,000 stays intact.

Bitcoin SV saga

The focus of the market shifted from Bitcoin’s safe-haven status amidst military conflict escalation between the US and Iran to the potential release of 1.1 million (BTC). The self-proclaimed Bitcoin creator Craig Wright announced that the mysterious courier delivered the missing keys that will allow getting access to the Bitcoins mined in the early days of the cryptocurrency. This development triggered a massive pump of Bitcoin SV, the coin supported by Craig Wright and promoted as a true Bitcoin. Bitcoin SV was launched in 2018 as a result of a controversial hard fork on Bitcoin Cash blockchain.

Notably, several large cryptocurrency exchanges delisted Bitcoin SV due to high profile scandals between Wright and cryptocurrency community members. According to CryptoCompare statistics, BSV is most actively traded on HitBTC and Bitfinex. The trading volume on other exchanges either non-existent or negligible.

However, many experts believe, that Bitcoin SV has no solid growth factors, while the sharp upside momentum is a result of a pure speculative pump that will be inevitably followed by the dump. At the time of writing, BSV/USD is changing hands at $294.5, down 6% in recent 24 hours.

Bitcoin options on CME

Meanwhile, the Chicago Mercantile Exchange (CME) successfully launched options on Bitcoin futures citing strong investor demand as a primary reason behind the decision. A holder of an option contract has a right to buy or sell a certain amount of coins within a set time frame. These instruments significantly expand hedging opportunities and improve risk management strategies. Apart from that, options are regarded as another step towards making Bitcoin investments easy and hassle-free fo institutional investors

During the first trading day, 55 options contracts worth $2.4 million changed hands on CME. This figure is much better than the debut trading volume of similar contacts launched by Bakkt in December.

According to the recent research, conducted by Grayscale Investments, accredited investors such as hedge funds continued to pour in money in the cryptocurrency industry, In 2019 the total inflow in cryptocurrency-based funds exceeded 600 million, which is more than the total amount raised in the previous six years.

BTC/USD: technical picture

Bitcoin touched an intraday high at $9,010 and thus surpassed $9,000 for the first time since November 11. At the time of writing, BTC/USD is changing hands below $8,900 as the momentum was not strong enough to allow BTC to hold above the critical resistance area. For further recovery, we will need to see a sustainable move above $9,000-$9,100 area, which includes SMA200 daily and the upper line of the daily Bollinger Band.

Once it is out of the way, the upside is likely to gain traction with the next focus on $9,700 (38.2% Fibo retracement for an upside move from December 2018 low to July 2019 high). This resistance is followed by a psychological $10,000. Many cryptocurrency experts see this level as a pivotal for Bitcoin as there are a lot of trading volumes accumulated around this area. It means that we might need several attempts before it is broken with next major focus on 2019 high at $14,000.

On the downside, the key support is located at $8,500. this area has been tested several times during the recent days, but the sell-off into that area always resulted in a renewed buying interest. However, it is broken, the downside pressure may increase with the next focus on $8,000 reinforced by SMA100 daily and the middle line of daily Bollinger Band. This area served as support since January 11, most likely, it will reduce the bearish pressure and generate a new bullish wave by attracting new buyers to the market.

BTC/USD daily chart

The  Forecast Poll of experts has improved slightly since the previous week. The expectations on all timeframes are bullish now, along with the improvement of the forecasted price levels.  The average price forecast on all timeframes moved above 8,000. Notably, the quarterly price forecast surpassed $10,000, which is significantly higher from the current price. It means that the experts are optimistic about Bitcoin in the long run.