Bitcoin price analysis (1–6 September): Is it time for a dip?
Bitcoin could start a deeper correction below the 20-day EMA
Bitcoin has been stumbling at the overhead hurdle of $50,000 for the past few days, but analysts remain bullish for the long term.
Willy Woo, on-chain analyst and creator of the Stock-to-flow Bitcoin models, speaking on the What Bitcoin Did podcast, said: “This cycle is not a 2013 double pump and a blow-off top – this is completely different. This is the new 2020 onwards cycle, which we’ve never seen before.”
Anthony Scaramucci, CEO and founder iof SkyBridge Capital, said in an interview with Cointelegraph: “The bottom line is, you have the limited and fixed supply of bitcoin, and you have every month exponentially more demand. As long as I see that, I see those prices rising. So, we’re going to stick with the $100,000 price target before the end of the year.”
Glassnode, in its latest weekly report, “The Week On-chain,” said: “Supply dynamics seem to suggest an extremely robust underlying demand is present, and this should continue to be quite constructive for prices if the trend continues.”
However, not everyone is bullish on Bitcoin’s future. Billionaire investor John Paulson, in an interview with Bloomberg, said: “Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.”
Will bitcoin extend its recovery in the short term, or is it time for a correction to set in? Read our bitcoin price trend analysis to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin’s price witnessed a minor dip last week when it fell 0.99% to end at $48,795.70. The Doji candlestick pattern last week shows indecision among the bulls and the bears.
If the uncertainty resolves to the downside and the bears pull the price below $46,291.75, the BTC/USD pair could drop to the 20-week exponential moving average (EMA). A strong rebound off this support will suggest that the sentiment remains positive and traders are buying on dips.
The bulls will then make one more attempt to push the index above the 61.8% Fibonacci retracement level of $51,056.35. If they succeed, the pair could start its journey towards the next target of $60,000.
What is your sentiment on BTC/USD?
Contrary to this assumption, if the price dips below the 20-week EMA, it will suggest that supply exceeds demand. In that case, the pair could decline to the 50-week simple moving average (SMA).
The Bitcoin price weekly analysis shows profit-booking near $50,000. Can bulls overcome this resistance?
Bitcoin price technical analysis: daily chart
Bitcoin’s price rebounded off the 20-day EMA on 27 August, but the bulls could not clear the overhead hurdle. The pair turned down on 30 August and has again dropped to the 20-day EMA. The long wick on the 31 August Doji candlestick shows that bears continue to sell on minor rallies.
If bears sink and sustain the price below the 20-day EMA, the pair could drop to $43,939.45. If this level also cracks, the next stop could be the 50-day SMA. Such a move will suggest that the bullish momentum has weakened, and the pair may remain range-bound in the short term.
Conversely, if the price rebounds off the current level, the bulls will again try to push and sustain the price above $50,000. If that happens, the uptrend may resume.
How to trade bitcoin this week
Bitcoin is facing resistance near $50,000 and buying at the 20-day EMA. If bears sink the price below the 20-day EMA, the short-term trend may turn negative. The bulls will have to push and sustain the price above $50,000 to gain the upper hand.
The views and opinions expressed in the article are those of the author, and do not constitute trading advice. Trading and investing bitcoin involves substantial risks, and you should do your own research or contact your financial advisor before arriving at a decision.