Skip to content Skip to sidebar Skip to footer

Late last month, Bitcoin (BTC) saw a jaw-dropping trading session, with the cryptocurrency’s price gaining 42% in a 24-hour time frame; this was BTC’s best daily performance in over six years. This move, which brought the asset from $7,300 to $10,500, shocked many, with many seeing the surge as entirely non-sensical.

Related Reading: Bitcoin Twitter Engagement Tumbles to Two Year Lows as Sentiment Turns Bearish

Though, retrospective analysis has shown that $7,300 was the price of the 200-day moving average on the CME futures market at that time, making the 42% bounce extremely peculiar.

While there is no guarantee a bounce will happen again, Bitcoin is yet again knocking on the door of the 200-day moving average on the CME’s chart. What do analysts expect to happen this time around?

Bitcoin Taps Key Level; What’s Next?

For those unaware, the 200-day moving average of any asset is seen by technical analysts as a level indicative of macro trends; trading above the level implies a macro bull trend, trading below the level implies a macro bear trend. As this excerpt from an Investopedia entry reads:

The 200-day simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall long-term market trend…  As long as a stock’s price remains above the 200 SMA on the daily time frame, the stock is generally considered to be in an overall uptrend.

As pointed out by analyst Mexbt and as mentioned earlier, Bitcoin tapped the 200-day moving average on the CME. This time, this price hasn’t reacted, with BTC flatlining just a smidgen above $8,000.

While a 42% rally off the 200-day moving average is highly improbable, there are some signs that bulls may be ready to take over the cryptocurrency market yet again.

Per previous reports from NewsBTC, the Tom Demark Sequential indicator, which uses time and prices to determine trends and reversal points, has just printed two “buy nine” candles on the CME and Grayscale’s Bitcoin Trust charts. Also, just today, the actual spot BTC chart just printed a buy nine.

That’s far from the end of the bull narrative. Trader Coiner Yadox recently noted that Bitcoin’s price action from the long-term bottom of $3,150 established in December of 2018 until now looks much like a textbook Richard Wyckoff pattern, which is marked by a strong surge upward after a bear market, a double-top pattern, an accumulation throwback, and then a bullish continuation after a bullish breakout.

Yadox suggested that should his interpretation of this Wyckoff pattern be correct, Bitcoin found a medium-term bottom at $7,400, and will soon see a strong breakout to the upside.

Capitulation Has Taken Place

Sure, the aforementioned is all well and good, though a key bear signal just appeared. The signal in question, the Hash Ribbons crossing bearish. As this outlet explained in a recent report, this signal implies that miners are capitulating, selling their coins to keep the lights on, cash out, or to upgrade their systems for the future.

The Hash Ribbons inverted literal days before Bitcoin began its 50% decline from $6,000 to $3,000. Also, this signal was seen just days before a 30% drop in 2016.

Related Reading: Bitcoin Visits Critical Long-Term Trendline; Break Below Could Lead to Massive Losses
Featured Image from Shutterstock

Nick Chong , 2019-11-21 12:00:17

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