Skip to content Skip to sidebar Skip to footer

This morning, Bitcoin price fell to under $7,100 abruptly before the first-ever cryptocurrency exploded through resistance at $7,300 all the way to $7,700 before it began to finally cool off.

Can bulls push Bitcoin higher and reclaim critical resistance as support once again, resulting in a rally leading up to Christmas? Or will bears swat down the attempt to break higher here, resulting in a not-so-happy holiday season for crypto investors?

Bitcoin Price Rockets to $7,700 in Sentiment Driven Short Squeeze

When Bitcoin was trading at lows below $4,000, sentiment was at extreme lows, with bearish crypto traders, analysts, and investors alike calling for even deeper lows, as low as $1,000 or more – essentially the complete demise of Bitcoin.

But Bitcoin exploded out of that range, resulting in a parabolic rally or echo bubble, that took the price of the most valuable cryptocurrency by market cap up 350% to a high of $14,000. At that point, crypto investors were once again talking about lambos, citadels, and riches beyond their wildest dreams, signaling irrational exuberance not witnessed since the crypto hype bubble in 2017.

Related Reading | Perceived Bitcoin Value Outpaced Peak Crypto Bubble Mania

Anytime sentiment reaches such extremes, assets tend to reverse. Such was the case once again today when the price of Bitcoin broke down to under $7,100. The entire market immediately became extremely bearish, and rightfully so – Bitcoin has been in a steady downtrend for months now, and recently retested former bear market lows around $6,500. Fear is back in the crypto market in a big way.

bitcoin price chart

As short sellers piled on this morning expecting Bitcoin to once again set new, lower lows, the often contrarian market pushed higher, squeezing short-sellers out of their positions, forcing them to close positions and further drive up the price of Bitcoin.

The sentiment-driven short squeeze took Bitcoin price as high as $7,700, but bears were quick to push the price back down to $7,500, where Bitcoin must break above resistance to rally higher and have a chance of breakout out of the current downtrend.

Related Reading | Bah Humbug! If Bitcoin Bulls Can’t Reclaim $7,800 It’s Coal For Christmas 

If Bitcoin can break above $7,500, it has a number of key resistance levels above it now from all the consolidation that has taken place over the last few months. Below here, Bitcoin could either fall to the low $6,000s, or potentially fall to $5,800, or even as low as $4,200 where the breakout into the April 2019 parabolic rally first occurred.

If support is found at any of these former resistance levels, Bitcoin’s bull market may not be over after all, and after the current correction finishes, could be off to the races once again. But it will take a much stronger push from bulls here into the holidays for Bitcoin’s current trend to reverse.

Featured image by Shutterstock

Tony Spilotro , 2019-12-04 17:16:14

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