BTC/USD Stalls Between $30k and 40k, Is Bitcoin in Sync with the Power of 3?
The Bitcoin price is known for its gyration. Because of this, there is volatility, and is exactly what excites traders. Assuming their skills are refined, they can either make a fortune or pay dearly for untimely entries.
Thing is, volatility is a double-edged sword.
Trading, after all, is about the bottom line. Make as much money as possible. The pace of money minting, as traders put it, depends on how sound the asset being punted on is. In Bitcoin’s case, traders are confident in the network’s value proposition and prospects as well.
If all is said and done, Bitcoin is the most valuable coin and the most secure, even better than traditional systems considering there is no intermediary and every move is traceable and backed by the diverse community.
Bitcoin Rose $22k in 22 Days
This may be exciting, sure, but what triggers traders much more than the network’s value proposition, it appears, is the rapid movement of Bitcoin prices in the last few weeks. There were re-arrangements in May 2020 following the halving event, but the BTC/USD price has been on a tear since then.
The coin’s price has blasted above $20k, a resistance level that took several years to reclaim, and more than doubled after a record 22 days. The value accrued during this time, when BTC prices soared above $20k to $42k, can be equated to the time taken since inception when BTC rose from obscurity to be the most trusted network being experimented on by individuals to becoming a trusted—relatively volatile digital asset, being scrambled on by institutions and family offices. All are desirous of getting a piece of this pie.
However, as aforementioned, Bitcoin is volatile, and the asset price is relatively unpredictable. Its market size is minuscule–a mere fraction of gold, and comparatively illiquid. Analysts pin the digital gold’s haphazard price and choppy price movement to its thin—but growing, liquidity.
Over time, though, volatility has been tapering, shrinking as more investors flow to the asset, considering the censorship-resistant coin in their vast portfolio, a net positive and endorsement for crypto as a whole.
The BTC/USD Price and “3”, What’s Happening?
Even so, amid this influx and volatility, there is an emerging pattern that analysts have noted about Bitcoin’s prices. The coin’s prices have been stalling—consolidating throughout its short history, especially around the number–3.
Take, for instance, in the formative stage of crypto and Bitcoin. Its price rapidly rose to $0.3. However, at this level, it plateaued, flat-lining for a period of time, causing some of its holders to liquidate their holdings—though, at that time, there wasn’t a developed market for the digital asset to track the flow of capital effectively.
Over time, bulls managed to crash above this mark, rallying to over $1—the China pump, before racing to over $1k to $20k in late 2017. However, something interesting happened when the Bitcoin price crashed in 2018. At its pits in late December 2018, the BTC/USD price found support at around the $3k to $4k region.
Analysts can explain that this was a coincidence that syncs with patterns.
Around this level, the BTC/USD price had sunk, shaving over 75 percent of its value, finding support at the 78.6 percent Fibonacci retracement level at $3.2k.
Notably, before prices bottomed up to rally to $14k in June 2019, prices consolidated around the $3k to $4k level for five (5) months.
Again, the “level 3” was of significance for BTC prices, laying the foundation as a launchpad for what followed in the next few months. From $3k, prices by more than 4X to $13.8k, peaking in June 2019 before falling back, less than a year before halving in May 2020.
From price charts in the weekly chart, if historical patterns of the early years of the asset and specifically those of late December 2020 guides, there is a chance that BTC prices may, at spot rates within the $30k to $40k frame, consolidate after crashing from $42k for a protracted period before rallying, syncing with happened before.
Analysts are projecting the BTC price to ease past $50k and double to $100k. In their estimations, BTC/USD may hit over $100k in December 2021. Therefore, if we cycle back to December 2018, highlight how prices have been reacting at around “level 3,” odds are, the BTC/USD price is in for a long period of accumulation.
This may average six months. Accordingly, it appears–judging from the back-and-forth of the last few days–that the foundation for $100k is being set, a moon-swing before prices perhaps consolidate at $300k, a 3X expansion.