After last week’s sharp pullback, BTC seems to have found stability in the new $8000-$8500 range. With the price down by over 40% from the $14k registered in June, crypto investors are seemingly worried about a crypto winter redux. Bullish analysts, on the other hand, feel that the recent pullback is a transitory blip caused by the tepid volumes on Bakkt post launch and the possibility of miners selling physically-settled BTC futures on Bakkt to hedge their price risk.
JP Morgan’s analysis shows that the long position open interest has been consistently on a decline over the past two months, with BitMEX longs capitulating during last week’s flash crash. However, the net open interest on CME remains long for BTC futures.
The upside case is clear – With mining reward halving event around 9 months away, there is optimism in the air that we can see a trend reversal happen in the next few months and expect BTC to set new yearly highs. However there could also be year-end tax loss harvesting related sales, especially as we head deeper into the final quarter of 2019.
A look at previous trends shows that BTC’s recovery phase could last from a few days to more than 2 years, indicating that the current market recovery could well be a slow and steady process.
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