(DAILY NOTION): Is $50,000 The Next Goal for The Bitcoin Bulls?

Source: Yahoo Finance

After hitting a high of $47,899.08 on Feb 9, the Bitcoin bulls appear to be taking a breather as the price is going through a consolidation. At the time of writing, the price is trading below its 50-day Moving Average (MA) and stands at $46, 271.61. Even so, there is a surge in trading volume during this consolidation, which indicates that the ‘Tesla Effect’ on Bitcoin is still prevalent.

At present, there are no definite clues from the Moving Average Convergence Divergence (MACD), showing that the bulls and the bears are still in a battle to take the rein. The Relative Strength Index is at 36, which is remarkably close to an oversold condition and making it a good time for bullish Bitcoin buyers looking to enter in.

So, will Bitcoin hit $50,000 anytime soon? Analyst John Isige from FX Street believes that the bulls have what it takes to hit this, as evidenced by the formation of a potential golden cross pattern on the four-hour chart, a crossing of the 100-Simple Moving Average (SMA) above the 200-SMA. Meanwhile, a key support level lies at $45,000.

However, Peter Brandt, a seasoned trading veteran, cautions that the Bitcoin bubble could pop soon. This is based on Bitcoin’s past trends that showed pullbacks happen when there is increased buying volume.

Bitcoin appears to be one of the hottest words on the market at the month, thanks to Tesla and Elon Musk. Tesla’s bold move could see other institutional investors to follow in its footsteps. The fact that major cryptocurrency exchanges, such as Coinbase, crashed after Tesla’s announcement, also shows that there are plenty of retail investors who are experiencing FOMO when it comes to the flagship cryptocurrency, fondly known as the digital gold.

This heightened sense of FOMO alone could very well support the bulls higher, even with a correction expected. Furthermore, inflation is expected to rise, as the Biden Stimulus Package inches closer to getting approved without Republican support, which can lead to increased spending within the U.S. economy and the U.S. Federal Reserve apparent direction not to raise interest rates for now.

There is now a greater cause for traders to search out potential hedges against inflation, and when they do it, they will be drawn to a word that is probably the most popular one this week, after Elon Musk and Tesla, and that word is Bitcoin. However, traders are cautioned to practice sound risk management principles when faced with a FOMO sentiment around a particular investment vehicle, instead of getting carried away on a FOMO wave.

In the meantime, is that the roar of the BTC bulls we hear on the horizon? The markets are watching, and this time so is most of the world.

BTC/USD (as of Feb 10, 2021, 9.55 a.m., GMT +8) - $46,271.61 

FOLLOWME BTC/USD User Sentiment (as of Feb 10, 2021 at 10.35 a.m.)

Short – 72.11%

Long – 27.89%

#TESLA#