Bitcoin Revisits $13.5K After Posting Best Month Since April
After October's double-digit price gain, bitcoin may be looking at a short-term pullback.
Bitcoin's bulls are taking a breather after a double-digit price gain in October.
- The leading cryptocurrency by market value is trading near $13,500 at press time, representing a roughly 2% decline on the day, according to CoinDesk's Bitcoin Price Index.
- The minor decline comes after last month's 28% rally, the biggest single-month gain since April.
- On Saturday, bitcoin had surged to a 33-month high of $14,093 but quickly fell back.
- Some analysts think a bigger pullback may be seen in the short term.
- "If we consider overbought daily technicals plus failure to beat the 2019 high resistance and a risk-off backdrop, it is perfectly reasonable to anticipate the possibility for a healthy decline ahead," Joel Kruger, a currency strategist at LMAX Digital, told CoinDesk.
- Bitcoin's failure to establish a foothold above the June 2019 high of $13,880 has validated the short-term bull fatigue signaled by the 14-day relative strength index (above left).
- As such, some technical traders may feel tempted to take profits, forcing prices lower.
- "There might be small corrections, as some market participants, who bought at lower prices, may exit the market," Ashish Singhal, CEO of cryptocurrency exchange CoinSwitch, said.
- Further, continued coronavirus-induced weakness in stock markets could trigger a global demand for cash, as seen in March, aggravating the technical pullback.
- Another source of risk for bitcoin is the U.S. presidential election on Tuesday, according to Singhal.
- Many fear that the results of the election will not be immediately clear, resulting in a period of uncertainty for the markets.
- All these factors considered, the possibility of bitcoin revisiting the former hurdle-turned-support of $12,500 cannot be ruled out.
- "Unless the market can establish above $14,000, there is a risk that rally stalls here in favor of a healthy retreat," Kruger said.
- While a pullback could be seen, analysts don't foresee a price crash, as the cryptocurrency currently has a strong bid from institutions, trader and analyst Nick Cote told CoinDesk last week.
- Disclosure: The author holds small positions in bitcoin and litecoin.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.