Bitcoin Reclaims $8,000: For Now
Rowan Crosby • 2 min read
Bitcoin has weakened a touch over the last 24 hours and now there is plenty of attention on what the next move might well be.
For the time being, BTC has reclaimed the $8,000 level. But the thing that stops me from getting too bearish, is that we saw this same price action last time around at $7,000.
The interesting thing is there is still no clear reason behind the move. There are a number of theories though:
Flight to Safety
In the past, it has been suggested that BTC was a bit of a safe haven asset. Given the backdrop of the trade wars, some are suggesting that might be a reason for the move. I tend to disagree as we have seen BTC fall so fast and so sharply that it can hardly be considered a store of value.
This time around, Bitcoin is far easier to trade with a number of mainstream brokers like Robinhood and soon eTrade, alloing punters the chance to get involved. On the last run, these guys were not offering BTC so it was harder to buy. I like this theory.
Going forward there will be a reduction in the reward offered to miners, meaning that supply could dry up in May 2020. So there is some degree of economics behind a likely move here.
This could just be an old fashioned short squeeze. Now that there are more products like CFDs and Futures, that allows you to short BTC, there is more opportunity for the shorters to get whacked if things go wrong. This could well have happened here as well.
In reality, it might be some or all of these factors at play, but what is for sure, BTC is a tough short at current levels. Like I’ve been saying, wait for a hold below a key level if you want to get short, but at the moment, we are still looking very vertical, despite the fall.