Skip to content Skip to sidebar Skip to footer

The crypto market has reached a period of stagnation. Volume is at extreme lows, suggesting interest in the emerging class of Bitcoin and altcoin assets may be waning.

Volatility has begun to increase, suggesting that action could also soon be picking up. However, one crypto analyst says that an alt season won’t occur until volume returns to the market, and in particular, Bitcoin.

Crypto Market Suffers Period of Stagnancy Following Extreme Hype

Bitcoin’s meteoric rise took the world by storm, as people rushed to buy up the scarce crypto asset. The entire run-up made many millionaires along the way, which caused retail investors to try their hand in the market.

Related Reading | List of Crypto All-Time High Prices Shows How Far Market Must Recover 

Since many felt they had already missed their chance to buy Bitcoin cheap, retail investors turned to altcoins. Getting in as early as possible meant that investors often looked to initial coin offerings, which were in large part built on the Ethereum protocol.

Bitcoin and Ethereum rising together caused a synergistic effect across the market, making it appear that anyone could become wildly rich just by finding the right altcoin.

Right as Bitcoin peaked, investors flocked to altcoins in droves, causing the price of the illiquid assets to explode. But those who bought in too late were left holding extremely heavy bags that are now sitting at as much as a 99% loss in some cases, and it’s left a bad taste in the mouths of retail investors who were burned as the bubble popped.

Now, almost two full years later, the crypto market is still stagnant, suffering from a general lack of interest. Bitcoin’s early 2019 rally started to bring some interest back into the market, but since then volume in Bitcoin is also drying up.

Volatility Returns to Altcoin Market, But Alts Are Waiting for Bitcoin Volume Trigger

However, volatility in altcoins is starting to ramp up once again, according to one crypto analyst. The analyst claims that it’s either due to volume being down for Bitcoin, causing a lull in interest and general boredom in the market, or lingering effects due to the China news pump back in October.

Still, the analyst is hesitant to claim an alt season is near, and believes that will not occur until volume returns to Bitcoin in a big way. Only then will the relationship with altcoins reverse into a positive trend.

While Bitcoin has regained much-lost ground from its all-time high, other altcoins, even top altcoins like XRP and Ethereum, are down as much as 80% or more from their all-time high prices and have a lot more catching up to do.

Related Reading | Bye-Bye Bitcoin? Why the Altcoin Bottom is In

As past performance has shown, when altcoins do rebound, they’re likely to outperform Bitcoin by a large margin, suggesting that this period of stagnancy could be the buying opportunity of a lifetime.

Tony Spilotro , 2019-11-19 18:00:39

Source link

Leave a comment

NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

Source link