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Ethereum (ETH) is ready to enter a new bear trend against Bitcoin (BTC). The daily chart for ETH/BTC shows that the pair has now run into a confluence of resistance levels that will be very hard to breach. There are two trend line and one horizontal resistance line that the pair has to break past if it is to begin a new uptrend. So far, it has become very clear that Ethereum (ETH) has run out of room to rally against Bitcoin (BTC). RSI on the daily chart for ETH/BTC has also run into a key resistance and is now eyeing further downside. The next downtrend in ETH/BTC is likely to be an aggressive one. In fact, it could be a lot more aggressive than what we have seen recently.

The next downtrend in ETH/BTC is likely to be more like the one we have seen between August and September. That would be painful not just for Ethereum (ETH) but the rest of the cryptocurrency market and it would coincide with an overall downtrend in the market. We have seen during periods of downtrend that Bitcoin (BTC) holds its ground better compared to other cryptocurrencies. The same is expected to happen this time which will be in tandem with what we expect to happen in ETH/BTC. It will also be in sync with a trend reversal in Bitcoin dominance (BTC.D) in the days and weeks ahead. All of these developments spell bad news for the cryptocurrency market in general and altcoins like Ethereum (ETH) in particular.

Ethereum (ETH) is also trading within a strong descending channel against the US Dollar (USD). This channel has yet to be broken to the upside or to the downside. However, the probability of this channel being broken to the downside is much higher at this point. Once ETH/USD declines below the 38.2% fib extension level, it would be hard to get back above it. We can see it find support on the 61.8% fib extension level next but the most probable scenario is that it will fall through it to decline much lower.

We know that BTC/USD is bracing up for its next downtrend, one that will be even more devastating for coins like Ethereum (ETH). We can expect a decline of more than 20% in Ethereum (ETH) from current levels in case of such a decline. It would not be surprising if the cryptocurrency ends up declining close to 40% from current levels. It may therefore be a good idea to wait if you intend to accumulate for long term. Ethereum (ETH) could decline much lower long term before it finds its true bottom. Considering that the stock market is on the verge of a long overdue correction, altcoins like Ethereum (ETH) remain a very risky investment at this point especially at current prices.

Jefe Caan , 2019-11-18 22:00:00 ,

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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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