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Bitcoin price has been steadily falling for weeks now, ever since the crypto asset experienced its third-largest one-day surge in its short history on the heels of news that China would be supporting the blockchain technology that the crypto asset is built on.

However, Bitcoin price may be ready to rally once again, according to a social media metric that hasn’t spiked this strongly since the day the China crypto pump began.

Bitcoin Could Pump As Sentiment Returns To Social Media

There are a number of factors analysts will look at to determine the interest level in an asset, traditional or digital. Fundamentals are among the first and most important factors to look at, followed by price charts for technical analysis.

Related Reading | Crypto Market Carnage: Altcoins A Sea of Red As Bitcoin Breaks Down 

Sentiment, is yet another important factor, representing the emotional state of investors. Sentiment can be difficult to accurately measure, but through the advent of social media, data can be derived from the chatter occurring in cyberspace that can help determine the level of sentiment in an asset.

According to data from digital asset data provider The TIE, tweet-sentiment – or the amount of Bitcoin-related Twitter activity on the social media platform – has reached the highest level its been since the China pump.

Back towards the end of October, Bitcoin price had a historic rally, surging from $7,300 to as much as $10,500 in less than 48 hours. But the massive rally was nothing more than a bearish retest of former support turned resistance, and Bitcoin price has been in a downtrend that has only increased in speed and ferocity as the price drops further.

But with the tweet sentiment metric spiking once again, Bitcoin price could see another strong rally if price follows sentiment just like it did following the Xi Jinping news. However, given the first every cryptocurrency falling to extreme lows in recent days, the increased chatter may be negative and therefore bearish.

Why Does Bitcoin Pump When Twitter Chatter Increases?

One theory for why price tends to spike as Twitter sentiment and chatter picks up, could be due to bots programmed to scan for news and general sentiment on social media. As this metric ramps up, bots could pick up on the hype and buzz, and it could cause an increase in buy orders as a response.

Related Reading | Dollar Cost Average: Even Bitcoin Investors Using This Strategy May Soon Be At A Loss

Or of course, the sentiment itself and additional chatter could drive increased interest in Bitcoin and other cryptocurrencies, causing the price to rise. Markets are driven by so many factors, and sentiment is among the most important ones.

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Tony Spilotro , 2019-11-26 20:00:35

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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.

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Nick Chong , 2019-11-10 12:00:38

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