Bitcoin is seeing a sell-off, but there is still clear evidence for a new bullrun
Despite all of the recent profit-taking activities that have permeated the market, Bitcoin's weekly gains still stand at a solid 6%.
- Experts believe that a run-up to AUD$100k (US$75k) could be on the books for Bitcoin in the near term.
- BTCs highly anticipated Taproot upgrade is scheduled to go live over the next few days.
- Bitcoin's dominance index (DI) currently stands at 43.1%.
After having touched an all-time high value of AUD$90k (US$69k) recently, Bitcoin has been faced with a lot of financial turbulence, causing the flagship crypto's price to fluctuate wildly. At press time, BTC is trading for AUD$89,790.
However, the aforementioned volatility has not fazed analysts, most of whom believe that Bitcoin's ongoing price action is quite unsurprising, as every time the asset makes a major run-up to a new ATH, it is usually followed by a substantial amount of profit-taking from smaller investors.
On the subject, Jean-Marc Bonnefous, head of asset management at Tellurian ExoAlpha, believes that the current dip is a direct result of a "technical consolidation" that was bound to occur after the recent sharp rally. Furthermore, he believes that more positive price action may be on the cards, especially with the US Consumer Price Index (CPI) rising by a whopping 6.2% recently.
As a quick reminder, the CPI is a metric used to estimate the average change in prices of everyday goods and services. It can also be used to gauge monetary inflation caused as a result of a nation's fiscal policies, such as excessive money printing, maintenance of low-interest rates, etc.
More bullish action incoming?
Even though Bitcoin continues to show an increasing consolidation trend around the US$65k resistance zone, pseudonymous crypto analyst and investor "GalaxyBTC" recently released a TA chart showcasing Bitcoin's possible ascent to a price point of US$75k over the coming few days. On the subject, he opined, "Yesterday's retest was needed to continue the bull run in a healthy manner. I think we will start pumping harder now."
It should also be noted that with Bitcoin's highly anticipated Taproot upgrade all set to take place over the next few days, it will be interesting to see how the market reacts, especially given the fact that the update will have a massive effect on the digital currency's privacy, security and scalability as well as its ability to interact with the flourishing decentralised finance (DeFi) market — which has grown 4x over the course of 2021 alone.
Also, next week the US Securities and Exchange Commission will either greenlight or reject VanEck's spot Bitcoin ETF application. If approved, the decision will most likely trigger another rally.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.