Bitcoin price prediction: a major BTC pullback cannot be ruled out
- The Bitcoin price has been in a major bullish trend recently.
- The pair jumped to a multi-month high of $62,800.
- We explain why the BTC price could soon have a pullback.
The Bitcoin (BTC/USD) price crossed the psychological level of $60,000 during the weekend. It rose to a multi-month high of $62,800, which was the highest it has been since May this year. This price was a few points below its all-time high.
Buy the rumour, sell the news
The Bitcoin price rallied sharply as investors waited for a key decision by the Securities and Exchange Commission (SEC) set on Monday. The agency has until Monday to deny or accept an Exchange-Traded Fund (ETF) by ProShares.
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After several false starts, analysts expect that the SEC will accept the fund this week. Shortly afterwards, it will accept ETF proposals by several other companies like Ark Invest, Invesco, and VanEck. They expect that the SEC will give a go-ahead since the chair, Gary Gensler, has sounded supportive of these funds.
Analysts expect that the funds will lead to more inflows into Bitcoin in the coming months. This, will in turn lead to more demand, which will push the BTC price higher. At the same time, the SEC is expect to give a go-ahead to ETFs of other cryptocurrencies like Ethereum and Ripple.
However, there is a likelihood that the Bitcoin price will record a major pullback this week. This is simply because of a market feature known as buying the rumour and selling the news. This is a situation where investors buy an asset ahead of a major announcement and then sell it when the news is announced.
The situation has happened several times before. For example, the BTC price rallied ahead of the Coinbase direct listing a few months ago. It then declined sharply the day after the company went public. Similarly, Dogecoin rallied sharply in the run-up to Elon Musk’s Saturday Night Live (SNL) performance. It then declined sharply since then.
Bitcoin price prediction
The four-hour chart shows that the BTC price made a major bullish breakout recently. This breakout happened when the coin made a bullish flag pattern. As it rallied, the price moved above the key resistance level at $60,000. The price was also supported by the 25-day and 50-day moving averages.
Therefore, while the overall trend is bullish, there is a possibility that it will have a major pullback this week. If this happens, the next key support level to watch will be $55,000. Check our full analysis for more Bitcoin price predictions.
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