Bitcoin broke below the bottom of its long-term descending triangle and could be setting its sights on the next area of interest.
Bitcoin chalked up yet another day of major losses as bearish momentum gained traction after the wedge and triangle breakdown. Price might be aiming for the bottom of the long-term descending channel from here.
This potential floor lines up with a long-term area of interest or former resistance turned support seen on the weekly chart. However, note that the triangle pattern is around $5,000 tall so the resulting breakdown could last by the same height, possibly taking bitcoin all the way down to the $1,000 mark.
Still, the 100 SMA is above the longer-term 200 SMA on this weekly time frame to signal that the path of least resistance is to the upside. In other words, there’s still a chance for long-term support areas to hold. Bulls might still be inclined to buy on dips after all, but it could take longer before the recent slide is undone.
Stochastic has been hovering around the oversold region for quite some time, indicating that bears are exhausted and that it’s time for bulls to take over. However, the oscillator has yet to pull higher in order to confirm that bullish momentum is picking up. RSI has also dipped into the oversold region to signal that sellers must be tired.
There seems to be no stopping the slide in the crpyto markets as bearish forecasts continue to pile in. Even the expected pickup in institutional investments early next year is looking like a long shot as investors may be discouraged by this recent slump.
FUD has been the prevailing sentiment in the markets so it would take a significant catalyst to trigger and sustain a big bounce. It doesn’t help that risk aversion is in play in the general financial markets while stock markets tumble and commodities take hits. Then again, historical price action has shown several instances wherein cryptocurrencies became the preferred “safe-haven” in extreme cases of risk-off flows.
The market is down again, and the current price trajectory is bringing new lows not seen for over a year. Bitcoin (BTC), normally the most stable asset in the room, has fallen through all of its price levels. Some doom-mongers are savoring a fall to zero and the Bitcoin bulls are worried.
But is this fear justified? Well, maybe not.
Stochastics aren’t often used in crypto technical analysis. In brief, they are used to indicate momentum: a convenient means to show changing trends before they are reflected in the prices. For this reason, stochastic indicators can also be used as a metric for when an asset is overbought or oversold.
Bitcoin’s stochastics indicate the recent price slide has taken the coin just below the 20 price range, suggesting the market has oversold the asset. In technical terms, this means that BTC is trading below its market value. It’s essentially an overreaction to bad news, such as last week’s Bitcoin Cash (BCH)hard fork, which will most likely correct once the dust settles and the market cools.
BTC Falls Below Support
The stochastics chart appears to confirm analysis that BTC is below its support levels. The sell-off over the past seven days took bitcoin below its floor price of approximately $6,200 per coin; traders lost hold of any guide rails for their decisions. With the downwards trajectory getting more steep, BTC holders are offloading to salvage some of their investment value.
“Short-term price fluctuations are rarely correlated to the stock market”, said Mati Greenspan, senior market analyst at eToro. “But the macroeconomic trends do tend to line up.”
It’s not just technical data that suggest this slide is an overreaction. In perhaps one of the most poorly-timed announcements of the month, Swiss authorities have approved the world’s first Bitcoin exchange-traded product (ETP), created by the UK fintech firm, Amun Crypto. The ETP basket will begin trading next week: 50% will be made up of Bitcoin; the other half will consist of Ether (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC).
Many readers will remember the market’s obsession with Bitcoin exchange-traded funds (ETFs) over the summer. CBOE (of Bitcoin futures fame) submitted an application, which the SEC postponed. Some had already criticized CBOE’s ETF proposal as too exclusive, being designed solely for institutional use.
One of the main advantages of the Amun Crypto ETP, according to the company’s CEO, Hany Rashwan, is that it allows both institutions and retail investors to participate. “The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies,” Rashwan told the Financial Times. “It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments.”
Financial instruments, like the Amun Crypto ETP, are a vindication for cryptocurrency holders. It’s a sign of a sophisticated market, one which regulators will allow in their jurisdictions.
Bitcoin bulls aren’t extinct yet
Bitcoin’s recent slide does not bode well for its price outlook. Moving averages are hardly promising, and the recent meltdown has made full recovery an even more distant possibility.
But it’s likely that Bitcoin’s price will hit a soft landing. Investors are used to BTC going for roughly $6,300; today’s plunge is an opportunity to buy at a $1,000 discount. When the market recovers from its momentary panic, developments like the Amun Crypto ETP will fuel further prices rises.
Crypto Briefing has previously suggested that what stopped a bull run a few weeks ago was a lack of momentum. But this could change. Bargain buying and a positive reaction to the ETP news could reverse the losses incurred over the past seven days. With sufficient velocity, the BTC price could rise back above its support levels.
Today the market is in the dumps, but the Bitcoin bulls could return…with a vengeance.
Bitcoin might be ready for an uptrend as it formed a double bottom reversal pattern on its 1-hour chart. This is often seen as a classic uptrend signal, provided that price can break past the neckline around the $6,600 mark.
If so, Bitcoin could climb by around $600 or the same height as the chart pattern. The 100 SMA is above the longer-term 200 SMA to suggest that the path of least resistance is to the upside or that the rally could gain more traction. However, the gap between the two moving averages has narrowed enough to suggest that a downward crossover is imminent. In that case, bearish pressure might still return and lead to another test of the bottoms.
RSI looks prime to head south so Bitcoin price could follow suit as sellers take over while buyers take a break. Stochastic has also just made it out of the overbought region to signal a return in selling pressure. A move below the bottoms could confirm that the longer-term slide is resuming.
A pickup in risk-taking has been observed in the broader financial markets on account of softer-than-expected tariffs from both the US and China. Besides, both these announcements have been hinted at in the past weeks so the bullish moves may also indicate profit-taking. Other altcoins have reported some progress, though, so it’s possible that the positive sentiment is also helping keep bitcoin price afloat.
Looking ahead, it seems that Bitcoin bulls are taking things slow while remaining wary of the SEC ruling on bitcoin ETF applications. It looks like markets are pricing in lower odds of an approval, although there still seem to be signs of hope. An approval is being touted as a potential catalyst that could spur the much-anticipated rebound in bitcoin for the year while rejection could reflect yet another setback.
The cryptocurrency market started off bullish this month but it seems like the “good” days (of the bearish nature) were here to stay for a longer time. Bitcoin [BTC] flash dropped within 30 minutes in the market and reached below $6900 on several exchanges. Bitcoin lost almost $500 in under five minutes.
According to CoinMarketCap, at the time of writing, Bitcoin was trading $6985 with a market cap of $122.18 billion.
The market speculates that the reason for this could be the recent movements of the Bitcoin wallet which is reportedly connected to Silk Road accounts. Recently, a Reddit user spotted that almost $1 billion BTC was on the move. These coins were transferred to Bitfinex, Binance and BitMEX in small portions.
Over the past 10 days, the wallet holder had transferred over 11,114 Bitcoin to Bitfinex, one of the leading exchange platform in the world and 4,421 Bitcoin was transferred to Binance, the leading exchange in terms of trade volume. In addition, over 210 Bitcoin was sent to BitMEX, the top Mercantile exchange platform.
In addition, earlier today, Bitcoin [BTC] was trading at its highest at $24000 in one of the cryptocurrency exchange platform in Iran as the government legalized cryptocurrency mining in the country.
Bitcoin was not the only one to bear the brunt of this flash crash. Altcoins have started to bleed as well. Ethereum [ETH] has dropped by more than 10% in just one hour and is trading at $258.86. XRP and Bitcoin Cash, the other leading cryptocurrencies in the market has fallen by more than 9%.
Moreover, Bitcoin Shorts has spiked up in the market and the speculation of Bitcoin price drop has been doing its rounds in the market since the beginning of this month. The data presented on CoinMarketCap shows that at present, the biggest trading volume for Bitcoin is on BitMEX, $3.3 billion.
Robby16, a Reddit user said:
“Shorts mate. Whale vs whale. Longs getting liquidated and rekt. Over 10om tether printed and sent to bitfinex to short.”
Uelga, another Redditor said:
“Crypto flash sale started again or what?”
Crypt0jakd, a Reddit user said:
“Here’s the bull market this delusional sub thought was imminent. Just a bunch of children screaming lambo”
Adam Furbey, a shorts trader from Christchurch spoke to AMBCrypto about this drop and says,
“Is this manipulation again? Like who settles for Bitcoin at $6890? This looks like a deliberate dump. This shit will keep everyone off crypto. Shorts is shit”
His friend, Remy, however, had a different opinion,
“This is when you should get into crypto, people like Adam run off from crypto, they are what I call weak hands. It’s good that they get out. We will have stronger hands.”
We haven’t seen any wild price predictions for a while. This is no doubt down to the bulls remaining silence during a market that has sunk through a siege by the bears. As a result of this siege, figures are down. Sadly, there is more to come and some experts do believe that we won’t see a recovery, until Bitcoin finally sinks below $5,000.00.
One expert even believes that before Bitcoin hits $20,000.00 again, it’s going to hit $2,000.00.
After this though, Bitcoin will hit $100,000.00.
This comes from the CEO of ADVFN, Clem Chambers. ADVFN are a financial services company who deal in stocks, FOREX and futures, amongst many other financial assets. According to Ethereum World News, Chambers has said:
“Will bitcoin go back over from its previous high? It will probably hit $2,000 before it hits $20,000 … But will it hit $20,000? I think so. Will it hit $100,000? I think that’s quite likely.”
This statement really does stink of bulls and bears living in absolute harmony. Chambers is quite literally predicting a huge price decreased, followed by an increase of absolutely mammoth proportions. Just to quantify what Chambers is saying here, in order to see this happen, based on today’s Bitcoin price of around $6,750.00, Bitcoin will see a decline of 70%. Then, Bitcoin will climb 900%, from $2,000.00 up to $20,000.00 meeting Bitcoins current all time high, before finally climbing another 400% up to a new all time high of $100,000.00.
$100,000.00 from today’s price would see an increase of 1380%, and an increase of 4900% based on Chambers initial prediction of Bitcoin hitting $2,000.00 first.
Please bear in mind that this is not investment advice. Here, we are reporting on an expert who has both very strong bearish and bullish feelings towards Bitcoin. Indeed, a fall to $2K is possible and likewise, Bitcoin can climb to $20K. In an ideal world, Bitcoin could also climb to $100K but the likelihood of this is very questionable.
Furthermore, in the words of Chambers:
“The blockchain will be the way of the future which will be like the internet was to the generation before. Bitcoin will probably be part of that future in the long term. There’s a shortage of actual money in the world. That’s what people, I don’t think, have worked out. That’s an economic suction going on there, and the cryptocurrencies are filling that vacuum. It will generate an economic lift.”
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