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$8K dive or $22K rebound? Bitcoin traders anticipate Q1 BTC price action

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$8K dive or $22K rebound? Bitcoin traders anticipate Q1 BTC price action

Bitcoin quarter

$8K Dive or $22K Rebound? Bitcoin Traders Ward for Q1 BTC Price Action

With the rise in Bitcoin prices late last year, traders are now wondering what price action to anticipate as Q1 2020 gradually unfolds. Will Bitcoin crash to $8,000 or make a rebound to $22,000 in the first quarter?

Why the Criticism?

Simply put, Bitcoin’s sudden price surge in the last quarter of 2019 was met with criticism. Growing suspicion that the price increase was nothing more than a bull cycle created doubt among savvy Bitcoin traders throughout the industry. According to some, said cycle could even be taken as a sign of the coming crash.

What Analysts are Saying

Experts remain divided on the issue. Many are also doubtful Bitcoin prices have already reached the peak and not seen further growth as the quarter unfolds. This can be attributed to a number of factors such as:

  • Political instability in certain countries might drive additional capital to Bitcoin
  • Rise in adoption of cryptocurrencies
  • Improvement of infrastructure and regulations
  • Launch of Bitcoin Future contracts like Bakkt

On the other hand, there are those that are not so optimistic and advise caution. The prevailing sentiment is that it is still too early to conclude that cryptocurrencies like Bitcoin have matured. This can be attributed to the fact that cryptocurrency related products and services are still in their early stages of development.

Summing Up

In the coming days and weeks, we will indeed see some interesting changes in the cryptocurrency market. Only time will tell whether or not Bitcoin prices will make a dramatic dip or rebound in the first quarter of 2020. Until the market settles, be sure to trade cautiously.

The start of a new year usually spells optimism in most markets, but traders appear split on their outlook of Bitcoin’s price action as the first quarter of 2021 approaches.

Some are bracing for a bearish downward trend wherein Bitcoin could signal an impending slide to the sub-$8,000 levels, while the more bullish traders anticipate a rebound to the $22,000 levels.

The cryptocurrency’s price is currently hovering around the $25,700 mark but was gaining momentum until the year-end when it experienced a steep decline of 15%. This slump has been attributed to profit-taking by traders and a seasonally driven decline in demand from retail investors, leading to a pullback from the all-time high of $42,000 it achieved in January 2021.

Technical analysts suggest that if the recent downward trend persists, we may witness a deeper retracement that could reach the $20,000-level. Additionally, a bias towards the downside may be expected due to historic patterns where Bitcoin has experienced a sliding trend in the first two quarters of the year before heading into a robust uptrend in the second half.

However, there is a contrasting view as potential catalysts could push prices to the upside. The highly awaited launch of CME Group’s Bitcoin futures options, which are slated to begin trading on Monday, could open the door for institutional traders to enter the market and trigger a surge in prices. As well, Goldman Sachs’ reported plans to offer Bitcoin as an investment option could also propel prices higher.

Where Bitcoin’s price action heads to as the first quarter draws to a close will be worth watching, with the outcome likely to decide whether the cryptocurrency is on track for a successful 2021 or fails to reach new highs.

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