Skip to content Skip to sidebar Skip to footer


After plunging to $6,800 on Friday, Bitcoin (BTC) has been subject to some reprieve; the cryptocurrency now trades at $7,300, up some 8-odd percent from the bottom. While this bounce is somewhat positive for bulls, especially considering the historical importance of the high-$6,000s, a key indicator suggests that there may be more pain to come for the market.

Related Reading: Crypto Tidbits: Bitcoin Dives Under $8,000, Fidelity Bags Trust License, SEC Takes Second Look at ETF

Bitcoin May Have Further to Drop, RSI Suggests

Analyst Byzantine General recently noted that the Relative Strength Index (RSI) — an oscillating indicator that tracks if an asset is overbought, oversold, or somewhere in between by factoring in the “magnitude of recent price changes” — for the one-day Bitcoin chart has hit 25, meaning slightly oversold.

The significance of this: Bitcoin’s one-day RSI rarely drops below 30, and normally hits 20 when it does. With this precedent in place, there is a high likelihood that BTC will continue to head lower from current price levels.

But… But… the Bottom is In

While Byzantine’s analysis of the RSI indicator suggests there is more pain to come, there is a confluence of evidence supporting the idea that Bitcoin found a local, and maybe ultimate, bottom in and around $6,700.

Firstly, as reported by NewsBTC previously, Scott “The Wolf of All Streets” Melker noted that during yesterday’s plunge to $6,800, BTC’s four-hour RSI hit 6.5, which is the lowest ever on Coinbase’s market and the lowest it has been in 2019. As the RSI oscillates between 0 and 100, a reading of 6.5, which is extremely rare, implies that the asset being analyzed is extremely oversold, and due to bounce as a result.

That’s not all. Dave the Wave, an analyst who called the drop to $6,700 months and months ago, said that there is a confluence of technical factors that suggest a long-term bottom was put in at $6,700. This confluence includes but isn’t limited to the three-year moving average—which currently sits in the low-$6,000s—is where BTC historically has found support in early bull markets and the fact that the cryptocurrency has bounced off the 0.5 Fibonacci Retracement level of the $3,200 to $13,800 range, implying bottoming price action.

Related Reading: Legendary Bitcoin Short Seller Says To Watch For Base To Form Before Buying
Featured Image from Shutterstock


Nick Chong , 2019-11-24 12:00:06

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