Bitcoin Price Fluctuations: Understanding the Effects of Bakkt Warehouse Launch

Bakkt Warehouse: A New Era of Bitcoin Custody

Yesterday marked an important development in the cryptocurrency landscape as Bakkt Warehouse opened its doors, allowing clients to deposit Bitcoin funds directly into their accounts. However, in a twist that would make even a seasoned trader raise an eyebrow, Bitcoin’s price plummeted by $700 just minutes after the announcement—an all-too-familiar dance of ‘buy the rumor, sell the news’.

Bitcoin’s Rollercoaster: The Price Performance

Taking a gander at the charts reveals a tale of ups and downs worthy of a soap opera. Initially, Bitcoin had reclaimed the $9,800 level as support and was eyeing the resistance zone of $10,800 – $11,000. But then, at the moment Bakkt’s tweet hit the digital sphere, Bitcoin’s price didn’t just take a dip; it belly-flopped from $10,900 to $10,200.

**Buying the Rumor:** Traders hoard assets in anticipation of market-enhancing events.
**Selling the News:** Investors cash out, often leading to price drops once the event occurs.

This isn’t a new tragedy; it’s the same format we’ve seen play out during previous Bitcoin halvings and altcoin announcements.

The General Overview: Is a Bull Market Around the Corner?

Current signals indicate some re-accumulation following the initial breakout. Looking back at trends from 2016, it’s evident that the market oscillates between periods of sideways motion and notable upticks. As of now, all eyes are on the 21-Week Exponential Moving Average (EMA), a sizeable support factor during past bull runs.

**Upward Price Movement:** A solid breakout could hinge on positive fundamentals.
**Looking Ahead:** The anticipated May 2020 halving could spark bullish energy.

Market Cap Excluding Bitcoin: A Glimpse into Altcoins

Notably, while Bitcoin was dancing downwards, altcoin/BTC pairs began to show subtle signs of life. The total market cap excluding Bitcoin is navigating around previous resistance levels, suggesting a potential turnaround. Historically, when Bitcoin drops, altcoins tend to follow suit—but this time, a counter-trend may be developing.

From the previous cycle starting in January 2016, we can see that a market cap surge—eventually propelled by Bitcoin—was followed by a significant retracement that solidified new support levels. The altcoin market’s current performance ought to mirror this trend.

Ethereum: A Key Player in Altcoin Movements

Ethereum, a critical indicator of the altcoin market, is currently in a precarious position. With Bitcoin flatlining slightly, it needs to maintain key support levels to trigger a possible breakout. If ETH can manage to break above $155, it may pave the way for other ERC-20 tokens to join the party.

**Support Level:** Hold above $155.
**Target Price:** Potential climb to $370.

What’s Next? Bullish or Bearish Scenarios

As traders sip their coffee and make predictions, two main scenarios are looming:

Bullish Scenario: For this, Bitcoin needs to hold support at $10,100 – $10,200 and vault over significant resistance. If successful, we could see the highs of $14,000 back in play.
Bearish Scenario: Failing to break above $10,600 and losing support could drag Bitcoin down to $9,200, challenging the descending triangle pattern.

Amid all the chaos, the overall sentiment remains cautiously optimistic. A healthy re-accumulation may be building, creating fertile ground for altcoins when the time is right.

Will History Repeat Itself?

From the musings of seasoned traders to newcomers alike, one question persists: will the past’s cycles dictate future movements? Only time—and perhaps a crystal ball—will tell. For now, it’s a game of strategy, with traders using their best judgment to navigate the ever-turbulent crypto waters.