Cryptocurrency and blockchain conferences and attendees flood New York City this week, in what has been dubbed “Blockchain Week” over the past few years. The largest conference is "Consensus" and is hosted by major bitcoin player Coindesk. Blockchain is the technology underlying bitcoin and other cryptocurrencies, and while digital currency is just one implementation of blockchain technlogy, the fates of both blockchain and bitcoin are often seen as highly correlated.
For traders, in past years this week has brought new waves of general attention to cryptos, conversations about new technology adoption, and a boost to bitcoin values coming out of the week.
Historically, bitcoin has bounced from 10-69% following Blockchain Week. Last years event is widely viewed as one catalyst that helped propel the price of bitcoin to record highs later in the year.
Could a similar move happen for bitcoin traders this year?
Bitcoin has been trapped in a defined range generally between 8k and 10k for several weeks.
Downside pressure through late last week and into the early frames of last weekend was attributable to news of a raid of one of South Korea’s largest exchanges. South Korea is one of the largest crypto trading markets in the world.
Through Sunday bitcoin did recover some of the ground lost on Saturday.
Our view is the impact of Blockchain Week could be more muted this year than in the past due to the advanced price of bitcoin, compared to this time last year. While bitcoin is still down roughly 50% off its all time high established in January, it is still 4.5 times higher than at the same point last year. In other words, a feel good price rally on the back of communal cheerleading in Manhattan is much more possible when bitcoin is less than 2k, as opposed to 8 or 9k.
The current price trend is coiling tightly in a wedge pattern, and over the next few weeks, this could mean a sharp breakout to either side.
As an outlook for this week, we see support holding around $8,000 with the events in NYC being mildly constructive. However, it is our sense it will take a major catalyst to break back through resistance around the $10,000 level. We consider probabilities raised for a continuation of the current coiling pattern and are on watch for a larger breakout over the next month.
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