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  • Bitcoin reignites the downtrend on breaking the flag pattern support.
  • Bitcoin buyers have no choice but to camp at $7,000 and force an upward correction.

Bitcoin is extending the bearish leg from the levels we explored on Tuesday. If you look back, giving up the range support between $7,400 and $7,500 has proved to be a bad move for Bitcoin. Moreover, the upward correction has continued to be limited especially with the 50 Exponential Moving Average (EMA) on the 4-hour chart and the and the 100 EMA standing in the way.

The Impact of The Bearish Flag Pattern

The recovery from the recent low at $6,530 in November scaled the levels above $7,900. However, lack of steam left the crucial zone at $8,000 untested. The buyers, demoralized by the failure gather enough upward strength, disappeared into hibernation leaving a wide-open gap. The bears took advantage of the hibernating bulls to revenge, pushing Bitcoin towards $7,000.

XBT/USD 4-hour chart

XBT/USD price chart
XBT/USD price chart by Tradingview

The retracement has broken the bearish flag pattern support. Reaction to this pattern usually resumes the previous trend. In this case, XBT/USD is likely to refresh the lows under $7,000 heading to $6,500. However, if the buyers can make $7,000 impenetrable, an improving technical picture could reignite action in the direction of $8,000.

Meanwhile, the recent retreat suggests that $6,500 was not the bottom Bitcoin is looking for. The lack of enough volume and low volatility levels indicate that the contract upside will continue to be limited. At the same time, the hunt for a formidable bottom will continue in anticipation of the a New Year’s rally.

XBT/USD Key Levels

BitMEX index price: $7,135

Volume: $1.4 billion

Open interest: $680 million

Trend: Strongly bearish

Support $7,000, $6,750 and $6,500.

Resistance: $7,200, $7,400-$7,500.

Summary

XBT/USD Analysis: Did Bitcoin Bottom Out at $6,500?

Article Name

XBT/USD Analysis: Did Bitcoin Bottom Out at $6,500?

Description

Bitcoin reignites the downtrend on breaking the flag pattern support.
Bitcoin buyers have no choice but to camp at $7,000 and force an upward correction.

Author

John Isige

Publisher Name

Coingape

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Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



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John Isige , 2019-12-04 08:22:51 ,

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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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