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Bitcoin (BTC) price took a seemingly unexpected turn over the last week as the digital asset shed nearly $2,000 over the past 5 days. Last Sunday Bitcoin looked strong with a peak at $8,727 but by Friday the price found a floor at $6,776.  

With a drop of 22% within just 5 days, can investors expect a bounce to reclaim the lost ground, or will Bitcoin head to new lows to close out 2019? Let’s take a look at what could happen next.

Daily crypto market performance. Source: Coin360.comDaily crypto market performance. Source: Coin360.com

Why did Bitcoin dump?

Currently, there are many theories flying around Twitter. For example, some attribute the drop to the Plus Token scammer identified as a whale that dumped 7,000 BTC on Huobi. Others have suggested that the FUD surrounding China’s recent vow to dispose of crypto exchanges directly impacted crypto prices. It’s hard to gauge whether the current price swings are perfectly normal, or maybe, just maybe it’s some dude selling a lot of Bitcoin to buy something (god forbid). 

One thing is certain, and those of us who have been involved in the crypto space for a number of years will understand this point. China-driven FUD is a very real catalyst for negative price action. Whether it’s actual Asian sellers or Western investors panic selling is anyone’s guess, but it is worth noting that from a technical perspective Bitcoin price could be perceived as behaving as expected.    

Analysis of Bitcoin’s monthly chart provides explanation of the aforementioned theory.

BTC USD monthly chart. Source: TradingViewBTC USD monthly chart. Source: TradingView

The Bollinger Bands indicator on Bitcoin’s monthly chart tells one of two tales. Using the Bollinger Band moving average as a level of support in the $6,900 region, one can see that despite breaking through ever so slightly, Bitcoin price still bounced up from this level both on Nov. 22 as well as today. 

This can be interpreted in one of two ways. The price broke the moving average so the next step is down towards the bottom of the Bollinger Bands, which in this instance is around $2,547. Alternatively, one can infer that the price was rejected at the moving average suggesting Bitcoin price is still ranging between the moving average and the resistance, which is currently at $11,450. 

Some readers may interpret this analysis as hopium dealing but one must take a close look at the facts. Just one month ago Bitcoin price jumped from $7,500 to $10,000 in 24 hours out of the blue, and as far as the monthly chart was concerned, nothing was out of the ordinary. A 42% gain was basically just another day in crypto, or is it?   

The monthly MACD looks bearish

BTC USD monthly chart. Source: TradingViewBTC USD monthly chart. Source: TradingView

One indicator that stands between the bulls and the bears right now, is the moving average convergence divergence (MACD). There is only a week left until the monthly candle closes, and if selling pressure continues to increase for Bitcoin then the MACD looks set to cross bearish by January. This is not a drill, this is happening and this is not good for the bulls.  

The MACD can blow open at the last minute on lower time frames, however, this seems unlikely given that the indicator has only crossed 4 times in the last 5 years on the monthly time frame.

Is the situation better on the weekly MACD? 

BTC USD weekly MACD. Source: TradingViewBTC USD weekly MACD. Source: TradingView

The weekly MACD does not look much better either. The MACD is currently blowing open, after changing its trajectory on Oct. 14. If Bitcoin had maintained upward momentum investors would be looking for a bullish cross at this time, however not even the monster price pump at the end of October was enough to pull the digital asset back into bull territory. 

Bitcoin price targets 

BTC USD monthly chart. Source: TradingViewBTC USD monthly chart. Source: TradingView

The week ahead will be an interesting one. As can be seen on the Bollinger Bands on the weekly chart, Bitcoin has already penetrated the $7,500 support. This means next week as the new candle forms, it will open up the range slightly. 

At present the moving average serves as a solid level of resistance at $9,600 today, however, this is likely to be nearer $9,500 tomorrow as the Bollinger Bands broaden. 

Should Bitcoin have a relief rally when the markets open next week, the first port of call will be to reclaim the support on the Bollinger Bands which is around $7,350. From this point, Bitcoin will need to hold $7,350 for there to be any light for the bulls. 

Bearish scenario

There are more factors at play here than just the charts. Every time frame looks bearish and Bitcoin has very little preventing it from heading down to the $2,500 – $3,500 range from a technical perspective. 

However, 2019 has been a bumper year for investors that bought at $3,500, and much of the selling pressure could be attributed to people taking profit in large chunks, rather than dollar-cost averaging in and out as the more seasoned investors do.  

That being said, if one was a whale that had made 400% gains between February and July 2019, wouldn’t it make sense to spook the market at the end of the year in order to repeat the process again in 2020? 

Bullish scenario

The bull in me wants to believe that Bitcoin price is ranging between the Bollinger Bands on the monthly chart but the digital asset will first need to reclaim its previous support of $7,350 to ensure that the slight wick below the moving average can be ignored. From here, $9,500 is the next level of resistance, should this be broken, investors will feel more confident that Bitcoin could close the year with a 5 digit dollar value.

The views and opinions expressed here are solely those of the @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Cointelegraph By Keith Wareing , 2019-11-24 22:53:00 ,

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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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