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Bitcoin (BTC) has continued slowly grinding lower as bears gain the upper hand over bulls, and sellers have now led the cryptocurrency down to a key support level that must be defended or else it will open the gates for significantly further losses in the near-term.

Analysts are now noting that technical indicators may point to the possibility that Bitcoin is in the process of bottoming out, but BTC’s inability to post any strong bounce at $8,000 may point to an underlying weakness amongst the crypto’s buyers.

Bitcoin Falls to Key Support Level at $8,000

At the time of writing, Bitcoin is trading down nearly 5% at its current price of $8,160, which marks a notable drop from its daily highs of nearly $8,600 that were set yesterday morning.

Today’s dip to lows of $8,000 marks an extension of the sell-off that first occurred when BTC fell below $9,000, which had previously proven to be a strong support level for the cryptocurrency.

BTC did post a slight bounce at $8,000 today, signaling that this is a near-term support level that could bolster the cryptocurrency’s near-term price action.

One interesting factor that may play into Bitcoin’s near-term price action is the fact that leveraged funding is currently positive, meaning that there is a premium cost to enter long positions, which makes short positions a better value proposition at the moment.

Big Chonis, a popular cryptocurrency analyst on Twitter, discussed this in a recent tweet, explaining that it is currently a better value to countertrade using short positions until the ongoing downtrend begins shifting.

“$BTC – ever since the late October pump, Leveraged funding has been positive meaning there has been a premium cost to enter LONG positions even while #bitcoin continues to retrace, until this goes negative it’s still a better value to countertrade short, until proven otherwise.

Technical Indicator Signals BTC May Be Bottoming

Despite Bitcoin’s bearish price action over the past few weeks, one technical indicator may be pointing to the possibility that it is currently forming a long-term bottom.

The Cryptomist, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, saying:

“$BTC: Don’t think it will be long until bulls in the short term take the wheel as RSI on various time frames look bottomed! I do think this will be short term, before further descend towards a final touch of wedge support.”

Bitcoin’s response to its support within the $8,000 region will likely provide deep insight into the current market structure, as a break below this level would point to underlying bearishness that could mean significantly further losses are imminent.

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Cole Petersen , 2019-11-19 21:00:11

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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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