The much-awaited launch of Bakkt is just a few weeks away. On September 23rd, the Intercontinental Exchange (ICE) operated company will make its platform accessible to both retail and institutional investors. Customers of Bakkt will be able to buy, sell, and store bitcoin on the platform.
Many crypto-enthusiasts see the launch of the digital assets custodial platform as an ultra bullish catalyst
While the introduction of the futures platform is long-term bullish for the top cryptocurrency, we believe that it is due for one more leg down before it resumes its uptrend. If you’re a long-term investor, consider buying the dip because Bitcoin is in the early stages of a bull market.
Short-Term Bearish Case: Immediate Support Looks Exhausted
Many retail investors are jittery about Bitcoin’s recent price action. The cryptocurrency appears to be forming a large descending triangle pattern. This structure looks similar to the pattern that ignited the break below $6,000 support in November 2018.
So far, support of $9,600 has been tapped five times over the last two months. In technical analysis, this indicates that the support is drained. The lower high that forms after each bounce affirms the view that bulls are exhausted.
Long-Term Bullish Case: Bitcoin Uptrend Healthy Heading Into Bakkt Launch
Although we expect Bitcoin to continue consolidating in the next few weeks, any dip should be considered as a strong buy opportunity. That’s because the cryptocurrency’s uptrend line remains intact despite the numerous pullbacks.
Also, there are indications that the correction is about to end. The daily RSI has broken out of its downtrend line. In addition to that, we can see a bullish crossover on the daily MACD. These are indications of a resurging bullish momentum.
While we’re seeing these long-term bullish signals, it is important to note that the Bakkt futures contracts are settled in Bitcoin, not in cash. This is ultra bullish for the digital asset because the ICE-operated platform will remove BTCs from circulation and deliver them to their clients. This will reduce BTC supply on the open market, which will ultimately drive the price higher.
Bitcoin may look bearish short-term but overall, the uptrend remains strong. Thus, any move below $9,600 support should be seen as a bargain. There may not be another opportunity to buy at discounted prices as Bakkt will begin to take out BTCs from circulation and physically deliver them to their clients in about three weeks.
The reduction of BTCs from circulation as futures contracts are settled in Bitcoin rather than in cash is one of the main reasons why we’re long-term bullish on the cryptocurrency.