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If you’ve perused Crypto Twitter at all over the past months, you’ve likely seen the term “Bitcoin echo bubble” mentioned over and over again; bears of BTC and its ilk believe that the cryptocurrency market is in the midst of effectively a “do-over” of 2018’s Crypto Winter.

Related Reading: Crypto Tidbits: Bitcoin Dives Under $8,000, Fidelity Bags Trust License, SEC Takes Second Look at ETF

While some have laughed this off as pure conjecture, citing the fundamental developments of the cryptocurrency ecosystem and adoption events, there are some technical analyses backing the idea that Bitcoin is in the midst of an echo bubble, and will thus fall further from $7,100, where BTC trades today.

Bitcoin to Close Under Key Level

Trader Walter Wyckoff recently made a simple though astounding revelation: if Bitcoin closes the week on Sunday under $7,500, the price will have settled under the 100-week moving average, a key indicator of long-term support. This is important as the last time BTC closed under this support level, the cryptocurrency’s price fell by 35% in the three weeks that followed.

If history repeats, Bitcoin could drop to the high-$4,000s or low-$5,000s and then bottom from there, then begin its next leg higher.

What’s interesting is that $5,000 is where a number of analysts, not just Walter, expect for BTC to find a long-term bottom. Per previous reports from NewsBTC, an analyst going by Mac remarked that $5,100 will be the ultimate bottom of this recent downtrend because there exists a key confluence of support levels at that level: the double-month volume-weighted average price, a “price inefficiency fill” level, and the 200-week moving average.

A 35% drop to $5,000 also corroborates 888Velvet’s analysis, in which he called the recent drop from $8,000 to $6,700 over a week ago. The analyst’s chart implies that Bitcoin will bottom somewhere in the $5,000s or $6,000s — just as the abovementioned analyses expect too.

Not so Fast 

While there seems to be downside momentum, there is one indicator signifying that the bottom may be here. This is the Bitcoin Fear & Greed Index, which factors in a fair mix of volatility, market momentum and volume, social media trends, surveys, dominance, and Google Trends.

The Index printed a 23, which is on the “extreme fear” side of the oscillating indicator, just today. The reading of 23, and thus “extreme fear,” are relevant because many believe that emotions drive markets, especially the cryptocurrency market. As analyst RektCapital wrote in a recent blog post:

“Human psychology tends to be predictably irrational because many people tend to react similarly in certain contexts… Baron Rothschild made a fortune by buying when others sold in panic. His philosophy was to ‘Buy when there’s blood in the streets.’ Because the greater the fear — the larger the opportunity for profit.

Related Reading | Uncommon Bitcoin Metric Suggests Massive Profit Taking Is Underway 
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Nick Chong , 2019-11-25 01:30:26

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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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