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Bitcoin (BTC) has not seen any attempts to rescue the price so far. We have seen the occasional liquidity pumps here and there but not a sustained from the recent lows. This has now put the price at risk of further decline within the descending channel before any short term trend reversal. The 4H chart for BTC/USD shows that we could still see another crash similar to the one before which would bring the price down right to the bottom of the descending channel. It is pertinent to note that the vast majority of traders are still too optimistic and hoping for a temporary rally to $8,700 and higher levels from here. A surprise crash to liquidate more bullish positions can thus not be ruled out at this point. 

The technicals support further downside in BTC/USD but at this time we could have seen a relief rally. It is now beginning to become clear that we may not. We could still see an attempt to rally towards $9,000 but it would be hard to see that happen from current levels now that the near term outlook has changed. That rally is more likely to follow from $6,089 or any higher levels that the price finds support on like the 38.2% fib extension level at $6,596. The probability of another decline from current levels is quite high at the moment although it remains unclear how low the price will fall before some short term relief can be seen. If this decline is similar to what we saw last year in November then we can expect this descending channel to be broken as the price declines below $6,000.

The 100 Week EMA has been a key support for Bitcoin (BTC) that we have been watching it to defend. So far it remains above it but the odds of it plunging below the 100 Week EMA by the end of the day are quite high. If BTC/USD closes the week below the 100 EMA, the chances of a short term relief rally would be reduced significantly and we would then be expecting a sharp decline down to the 200 Week EMA. The 4H chart for Bitcoin dominance (BTC.D) is another indicator that tells us that the correction might not be complete yet. 

When the last crash came to fruition, we saw a retest of the 200 EMA and then a decline below that. When Bitcoin dominance (BTC.D) entered a downtrend after facing rejection at the 200 EMA, that is when we knew the correction was over. So far, that has not happened this time. There is now a lot more room for Bitcoin dominance (BTC.D) to rise which is why it would not be surprising at all if Bitcoin (BTC) crashes 15% or more from current levels in the near future. It would be a good idea to wait it out rather than trying to catch the knife because BTC/USD could decline straight to the 200 Week EMA without seeing significant upside short term.

Jefe Caan , 2019-11-24 15:00:00 ,

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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.

Featured Image from Shutterstock

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

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