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Bitcoin declined below $7,000 and it appears to be bearish on surface but I think the market could rally higher from here. The price has just found support on the 61.8% fib extension level and as we can see it has already started to move up. If BTC/USD ends up rallying higher from here, then the probability of a move towards higher levels in the near future would increase significantly. The recent crash is a lot similar to what we have seen before. The price crashed in one big candle which was then followed by a reversal attempt which failed and then further downside. After that it started to recover temporarily just like it has now. 

The point is, while everyone is expecting the price to decline straight to $5,500 from current levels, it may not happen that easily. We could see the market continue to play retail bears that are hoping for a sharp decline from current levels. Meanwhile, it is in the interest of the market makers and whales to trap in more bulls and inflict more pain on the bears before the next major decline. The ETH/USD chart shares a similar outlook as Bitcoin (BTC) and we have now seen the price begin to rally aggressively from the $141 mark converting a bearish 4H candle into a bullish one. The EUR/USD forex pair indicates that the is still room for the market to make its next big decision which means that the bulls could take control short term and push the market higher from current levels. 

The majority of retail traders remain fearful as indicated by “extreme fear” on the Fear and Greed Index. The index is currently down by another point from yesterday and is currently at 20. We have seen the market reverse short term most of the time whenever the sentiment has declined this low. However, traders should remain cautious. Although there is no reason to be overly bearish just yet, there is no reason to be overly bullish either. We can spot what looks like an IH&S formation the 4H chart for BTC/USD but it is important not to lay too much emphasis on this as we remain in a strong bear trend and Bitcoin (BTC) just closed last week below the 100 Week EMA with no significant signs of any bullish recovery just yet.

Jefe Caan , 2019-11-27 18:30:00 ,

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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

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