Bitcoin has made a fast comeback after dropping as low as $8,180 on Monday, the halving day. The comeback culminated in a surge past Wednesday’s primary $9,000 resistance, shown on the right side of the diagram below.
While the push over $9,000 takes BTC above a main technical point, liquidations did not meet much resistance.
When Bitcoin traded for hours on end at $8,800-8,900 before passing $9,000, short-sellers had plenty of time to deleverage their positions.
The rally has been paused, with Bitcoin keeping steady for hours on end just above the aforesaid breakout point. Cynics think this is a precursor to a lower turnaround, but growing numbers of analysts are starting to assume that Bitcoin is primed to re-enter a strong bullish pattern.
According to Analysts, Bitcoin Poised to Rally Higher From Here
Recently, one influential trader reported that Bitcoin recently printed the same pattern on the weekly chart that marked the beginning of the 2019 rally: seven weeks of consecutive gains, and then a “Doji” candle at the top of the trend.
What preceded this trend’s last event was a 160 percent raise over the course of about three months.
This means that the cryptocurrency could hit $20,000 as 2020 comes to a close, should history repeat itself.
Bullish as well, the leading cryptocurrency has recently sustained a huge historical uptrend, suggesting it will continue to scale higher in the days ahead.
As NewsBTC previously stated, Bitcoin’s basics are still better than ever, with the blockchain analytics company Glassnode noting that the figures show BTC’s increasing adoption. Greater acceptance correlates with higher competition and higher costs.
Preventing Significant Capitulation
Bitcoin rallying from here is critical in the coming days, as it prevents “serious capitulation.”
On May 11, Matt D’Souza, chief executive of Bitcoin mining company Blockware Solutions and a crypto-hedge funds manager, remarked that investors could expect serious capitulation if BTC trades sideways.
According to his company’s data, D’Souza says that 30% of the network is mining at a breakeven cost of $8,500. Making a step above this point is crucial for miners to remain in business.
Digital asset manager Charles Edwards agrees with the sentiment that the electrical cost of mining one Bitcoin alone is around $9,000 today.
Ensuring Bitcoin will exit this limbo where miners are neither profitable nor unprofitable can avoid a sell-off. After all, a “miner capitulation” in November and December 2018 allegedly caused BTC to fall from $6,000 to $3,150.