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Ouch. Bulls haven’t had the best of weeks, with Coin360 reporting that Bitcoin (BTC) has shed some 14% in the past week, trading at $7,300 as of the time of writing this article. Despite the decisively bearish price action, some believe that this market is bottoming, at least for the time being. Here’s why.

Related Reading: Echo Bubble Narrative Grows Stronger as Bitcoin Struggles to Find Support

Has Bitcoin Found a Bottom?

Firstly, the Chonky One noted made a simple observation on Friday morning that Bitcoin’s local bottoms and tops can normally be easily determined; more specifically, “during a bearish weak, Bitcoin usually puts in the low of the week on the Thursday or Friday… the same is true for the high of the week during a bullish week.”

Indeed, as his chart shows above, Bitcoin sees its most extreme price action on the Thursday or Friday of the week for some reason or another. With $6,800 being tapped yesterday, a Friday, the low of the week is likely in.

That’s not all. Scott “The Wolf of All Streets” Melker noted that during yesterday’s plunge to $6,800, BTC’s four-hour Relative Strength Index (RSI) had 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.

Pain to Come

While a local bottom was most likely found at $6,800, some still assert that more pain is likely in the coming weeks.

Indeed. Popular analyst Mac noted that the trend remains clearly bearish, even though bulls got some reprieve early Friday morning. The analyst backed this point by looking to BitMEX’s open interest, which is “keeping stable and increasing,” implying that few shorts are taking profit and buyers continue to open longs. Mac continued that Bitcoin loss the June volume-weighted average price level, and has entered a “void” in the cryptocurrency markets that could see BTC easily continue into the low-$6,000s.

Related Reading: Bitcoin Nears Key Golden Cross as Price Falls to $7,400: Bull Case Alive

Also, prominent gold proponent Peter Schiff recently brought up the idea that Bitcoin will return to $1,000, where it was trading prior to the 2017 bull market. More specifically, Schiff said that Bitcoin is nearing the neckline of a head and shoulders chart pattern, which suggests that if it’s broken, a measured move to $1,000 will be had.

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Nick Chong , 2019-11-23 18:00:33

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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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