Bitcoin continued its tumbling on Wednesday under the pressure of a rising US dollar.
Safest Haven Returns
The cryptocurrency plunged by up to 1.43 percent to hit an intraday low at circa $10,389. Its latest move downside came as a part of a larger bearish correction that began when BTC/USD had formed a year-to-date top at $12,486 on August 17.
Now trading at $10,469, the pair was down by 16 percent from its yearly top, showing a plunging demand for Bitcoin at higher levels. The selling pressure increased particularly as investors grew cautious of further stimulus from the US Federal Reserve.
The prospects of lesser dollar liquidity from the central bank and US Congress raised its bids among investors. That left other safe-haven assets under additional bearish stress, leading Bitcoin and Gold lower ahead of their third-quarter close.
BTCUSD breaks below key support levels against rising dollar demand. Source: TradingView.com
Analysts are now divided over the future course of Bitcoin. Some note that its current downtrend is a natural correction, especially after its 200-percent rally from its mid-March nadir. They expect the cryptocurrency to bounce back towards higher levels.
On the other hand, some see Bitcoin at much lower levels given the ongoing turbulence in the macroeconomic environment.
Dissenting Bitcoin Outlooks
One pseudonymous analyst said Wednesday that BTC/USD could undergo a “blood bath” because of a technical pattern as shown in the chart below.
BTCUSD is looking to fall below $10,000. Source: TradingView.com
The so-called Ascending Triangle appears as a continuation pattern on an hourly chart. BTC/USD has broken below it already, which means it should fall by as much as the size of the flagpole that appeared before its formation.
The breakout target for Bitcoin, in the case, is inside the $9,982-9,904 area.
Chart watchers Teddy Cleps and Josh Rager also increased their bearish bias based on Bitcoin’s inability to break certain resistance levels. While Mr. Cleps flashed $11,700 as the culprit behind the higher selling pressure, Mr. Rager went a little easier on his upside targets and said:
“I want to see Bitcoin back above $10,600 before I start to feel good about it. Traditional markets will likely continue to have a strong influence on BTC and the direction it takes.”
On the other hand, Standpoint Research Founder Ronnie Moas simply asked traders to stop trading Bitcoin. In his opinion, the long-term prospects for the cryptocurrency remain bullish because of ultralow interest rates, higher inflation targets, and quantitative easing.
“During the next 20 years, the US dollar under your mattress will probably lose 50% of their value. Bitcoin will probably jump by at least 1,000% during that time. Take some of your US dollars and buy some BTC. It is Not that complicated to figure this out.”
BTC/USD was attempting to close above $10,500 at the time of this publication.