Despite the rally seen this week, Bitcoin whales were seen accumulating and the asset has shown good resilience and is holding strong between the $46,500-49,500 range
NEW DELHI: September, historically, has usually been a bearish month for Bitcoin (BTC), as the world’s biggest cryptocurrency has delivered negative returns in six of last eight instances. Moreover, the digital asset has traded in the red for the last four September months.
While there is been no particular reason why Bitcoin doesn’t like September, experts believe BTC will break the jinx this time around.
On Thursday, Bitcoin regained the $50,000 level for the first time since 23 August amid bullish sentiment in the crypto market. Moreover, Ether, the world’s second biggest cryptocurrency, traded 6.3% higher at $3,755 at around 1300 IST, as per CoinGecko, a digital currency price and information data platform.
“I anticipate this year to be different since investors are actively taking in positions, which is taking the price higher. I believe bitcoin will touch or break its all-time high this month. The main reason for this is that the number of investors coming into market is at an all-time high," said Shivam Thakral, chief executive officer, BuyUcoin.
According to experts, despite the rally seen this week, Bitcoin whales were seen accumulating and the asset has shown good resilience and is holding strong between the $46,500-49,500 range.
Bitcoin whale refers to individuals or entities that hold large amounts of the asset, which gives them power to move prices.
“Bitcoin has a strong support at $42,000 and an upper side barrier at $50,000. It has to stay above the $51,000 level for 48 hours to change the trajectory," said Sidharth Sogani, founder and CEO, CREBACO Global, a research, rating and intelligence company focused on blockchain and cryptocurrencies.
Even in the recent past, the $51,000 proved to be a tough zone to crack for the world's largest cryptocurrency.
“There is strong psychological resistance at $51,000, and if the asset beats it, and sustains it, then we might see another rally upwards. However, historically, we have seen BTC consolidate post a sharp rally, and if that happens this time or not is something to be seen. A downward spiral is likely if the asset undercuts the $46,500 mark," said Nirmal Ranga, vice-president-trading, ZebPay.
After three months of consolidation, during which Bitcoin slumped to as low as $28,800, the digital asset surged almost 75% to a high of $50,505 on 23 August.
Post this move, the bulls have struggled to extend the gains and failed to take charge and break the resistance of $51,000 (61.8% Fibonacci Retracement Level).
During the last two weeks, BTC was consolidating and trading sideways in the range from $50,000 to $46,500.
“Once the close occurs above $51,000 with good volumes then we may expect the prices to further rally up to $57,175 or if it breaks the range on the lower side then the prices may drop to the next support level which is at $42,500," Ranga added.
As per Ranga, bitcoin’s key supports are at $46,500 and $42,500 levels and resistance levels at $51,000 and $57,175.
Despite the short-term resistance, some experts are bullish on bitcoin from the medium-term perspective.
“I believe the price of bitcoin has a potential to hit at least $75,000-80,000 by the year end of January 2022. This is basis the global scenario, where the money supply has been too high," said Sogani.
Thanks to the US Federal Reserve maintaining near-zero interest rates and printing more dollars to support the economy, hit hard by the covid-19 pandemic, stocks as well as crypto assets such as Bitcoin have seen bumper gains over the past 18 months.
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