Bitcoin Analysis for 11/02/2021

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Today, bitcoin's price suffered a minor correction after the massive 13% jump it enjoyed on Tuesday.

Additionally, just like we predicted early in the week, bitcoin's price went above $45,000, even though today it has corrected below this critical price range. At the time of this writing, it was trading around $44,700, according to CoinGecko. The cryptocurrency was down 4% over the last 24 hours at the time of this writing.

Still, we notice that buyers continue to pour fresh cash into the market since volume remains above the 21-day Simple Moving Average, at around $70 billion. While bitcoin has had a minor drop, we remain quite bullish on the short-term price action.

Institutions like Grayscale are increasing their bitcoin holdings, and companies like
MicroStrategy and Tesla are pouring billions of dollars into the market, a highly bullish sign.

Additionally, as we argued yesterday, it seems that these players are not interested in short selling. Our reasoning comes from the total amount of bitcoin sitting at exchanges continuing to decline, according to CryptoQuant.com.

As Pedro Febrero, an analyst at Quantum Economics, told Crypto Briefing:

"If we look into what these companies are doing with their Bitcoin, it seems that they're moving the coins into cold storage."

According to Febrero, these institutions will likely hodl and not sell soon.

In sum, as positive news continues to be released and more institutions join the bitcoin space, the odds that BTC/USD will continue to appreciate are high.

For now, we expect bitcoin to continue its uptrend and move above $50,000 soon.

Bitcoin seems to have found support close to $45,000, an excellent sign that price may continue to move into higher price ranges.

As a reminder, we are confident that BTC/USD will continue to move upward if:

• BTC/USD remains above its 20-day EMA (red), 50-day EMA (green) and 200-day EMA
  (blue).
• BTC/USD doesn't drop below $40,000.
• BTC/USD daily volume remains above its 21-day Moving Average.

What Do Traders Think?

Today's first tweet comes from Rekt Capital, whose Twitter profile describes him as a
cryptocurrency trader and analyst, as well as the author of the Rekt Capital Newsletter. His post shows the reason why we're so bullish on the short-term price of bitcoin.

Rekt Capital highlights that the recent drop in the price of bitcoin is "Not a Bear Market, just a healthy pullback."

Like we argued throughout the week, we expect the price of bitcoin to remain volatile during this bull season. This means we should expect sharp rises and sudden drops that may as well pull the price of bitcoin down 30%.

Nevertheless, this does not mean bitcoin is in a bear market. Instead, it means you have an opportunity to accumulate bitcoin at the cheap.

We hope you take these opportunities to expand your bitcoin portfolio, as we think the coin will continue to move to higher price ranges.

The next post comes from Mr. Anderson, whose Twitter account describes him as a "Long Term TA Trader."

In his tweet, Mr. Anderson explains the core difference between bitcoin and stablecoins, adding a remarkable critique at the end.

The trader first explains that bitcoin appreciates with volatility while fiat currencies depreciate with stability. This is quite simple to explain: even though bitcoin has its ups and downs, the price is trending upwards. On the contrary, fiat currencies lose value slowly due to inflation.

To support his thesis, Mr. Anderson states that

"10 years ago the #BTC was at par against the dollar. 1 #BTC equaled $1.”

However, today the panorama is much different. As he points out, bitcoin has appreciated significantly in the past 10 years, around 46,000 times versus the dollar.

To conclude, Mr. Anderson mocked those who claim bitcoin "it's not an SoV, not a currency, it's too volatile, it's just speculation," because even though their logic seems correct, the market completely disagrees. As the trader points out at the end, independent of your opinion on bitcoin, the truth is its price continues to go up.

The next tweet comes from Danny Scott, the CEO at Coin Corner, and it adds up to what we wrote above.

As Scott points out,

"#Bitcoin has closed 3 days above $40,000 so far. At the 2017 bull run #Bitcoin never closed a day over $20,000."

This incredibly bullish observation supports our thesis that there is much room for bitcoin's price to grow in the short-term. In sum, institutional investors and wealthy individuals continue to pour money into bitcoin, and this aligns with the fact that currently, there's very little bitcoin sitting at exchanges and is a recipe for price appreciation.

Scott seems to agree with us, concluding,"This isn't even close to the peak."

The last post of the day comes from Gigi, whose Twitter profile describes him as a writer and programmer working in the bitcoin space.

Gigi explains why so many players like bankers and economists fail to appreciate bitcoin in his short and straight-to-the-point tweet.

In our opinion, his arguments are flawless and show the reason why so many institutions and wealthy individuals are not interested in buying bitcoin.

Some lack digital savviness, like gold bugs. Others, such as bankers, cannot cope with the fact that bitcoin has a fixed supply. As Gigi wrote, there are even those who can’t accept the fact “they can’t control it.”

Regardless of the reason someone gives you not to buy bitcoin, we advise you to always consider their background before making a final judgment. Sometimes, it’s not that these people do not understand bitcoin, but instead, the problem lies with their incentives.

Bitcoin Price Prediction

Today, bitcoin's price declined 4%, after a massive rally early this week that boosted the BTC/USD above $45,000, according to CoinGecko.

Like we predicted in yesterday's Daily Roundup, we expected the price to trade close to $50,000, but as we wrote, we weren't confident that bitcoin would find support above this critical range just yet. As it turned out, sellers joined the space once BTC/USD broke $48,000.

Nevertheless, since bitcoin's price remains around $45,000, we're confident this minor drop will soon be forgotten. Additionally, we think that until bitcoin breaks the $60,000 price range, it's quite unlikely bitcoin retraces more than 10%.

Therefore, we think that the current bull run will continue, and our price target for the next few days is above $50,000.

As we wrote in the introduction, as long as institutional buyers pour billions of dollars into the bitcoin market, there is little chance of a price reversal.

Hence, how do we think the price will trade throughout the day? As shown in the above chart, we believe that bitcoin could top around $50,000 if new buyers enter the space.

Still, that's quite unlikely.

On the other hand, we don't expect the cryptocurrency to drop much below $40,500, even if the downtrend persists for a few more days. In the worst-case scenario, we see bitcoin finding support around $44,000 which means BTC/USD could get stuck at this price range for a brief period.

To finalize, the Volume Profile Visible Range (VPVR) shows a high number of buy orders between $33,000 and $36,000, and then again around $29,000, which means BTC/USD should not go below $28,000, even if there is a sudden trend reversal.

As a reminder, we believe BTC/USD will attain a brand-new record price of around $50,000 before Monday.

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