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The leading cryptocurrency by market cap, Bitcoin, has once again broken below $8,000 after the repeated defense of the critical support level by bullish crypto investors. Now that bears are back in control, they’ve already pushed Bitcoin price to as low as $7,500, putting Bitcoin is at risk of further downside.

But where are the key levels where a bounce may occur, and when will the crypto asset return to a bull market?

Bitcoin Price Breaches $8,000, Quickly Returns to $7,500

In late October, a powerful bullish impulse from $7,400 to $10,500, setting the crypto asset’s third-largest one-day gain in its short, decade-long history, caused the entire market to turn bullish once again, despite weeks of ongoing downtrend.

The thought was that Bitcoin doesn’t perform so well and have such enormous gains outside of a bull market, however, the entire move may have been nothing more than a massive short squeeze and bearish retest of former support turned resistance.

However, the powerful rally has all but been erased at this point, with the first-ever cryptocurrency falling to $7,500 this morning after a break of $8,000. Bitcoin price dropped below $8,000, and not even 24 hours later, another $500 was wiped out in value from the crypto asset.

Bulls have thus far been able to defend $7,500, causing a slight bounce to as high as $7,650 as of the time of this writing, but the defense is already starting to fail and return to declining prices.

Support at this level, ranging from $7,300 where the previous major reversal occurred, through $7,500 is a critical level that bulls must defend to prevent a much deeper drop into the $6,000 range.

What Happened to the Bull Market? Will BTC Return to Bear?

If bulls aren’t able to defend current levels, a push to as low as $6,600 to the bottom of the downtrend channel Bitcoin has been trading within since June is likely to result.

However, if bulls can defend this level, they must reclaim above $8,000 for a chance to return to a bull market. Otherwise, Bitcoin price could fall further into a continued bear market and potentially set a new bear market low.

Related Reading | Emotional Rollercoaster: Bitcoin Could Follow the Amazon Fractal, Big Upside Potential 

It’s long been thought that Bitcoin, after bottoming back in December 2018 around $3,100, was ready to begin its next bull run, but after the 2019 parabolic rally failed to set a new high, the crypto asset ran out of steam and has been falling in value ever since.

The days ahead are critical for Bitcoin, and the current price action could make it or break it for the first-ever cryptocurrency.

Tony Spilotro , 2019-11-21 15:45:46

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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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