Why the Latest Bitcoin Dump Could Actually Launch the Crypto Market into Bullish Territory

The bitcoin price on Wednesday depreciated as much as 2.56 percent on the back of a stronger US dollar. Paradoxically, that might not be such a bad thing for the crypto market.

The bitcoin-to-dollar exchange rate (BTC/USD) bottomed at $3,340 on an intraday basis, while retesting the low of January 29 trading session. There was a little attempt from bulls to reverse the price action with the bearish bias intact. Nevertheless, the pair consolidated above $3,340, which served as an opportunity to reclaim $3,400 in the near-term.

Bitcoin’s Six Triangles

BITCOIN (BTC/USD) 4H | SOURCE: COINBASE, TRADINGVIEW.COM

In our previous analysis published Monday, we had predicted a bitcoin dump as the cryptocurrency’s volatility and volume went lower than normal. We also noted a strikingly similar pattern between bitcoin’s current and previous price actions. In this analysis, we aim to elaborate on the same to predict where the next bitcoin move could be.

In the Coinbase chart above, we can see bitcoin trending lower inside a falling wedge formation. Inside the wedge, the price consolidated inside a small symmetrical triangle (1). It attempted a breakout that eventually failed to blossom. The price reversed and formed a large bear flag, then continued to consolidate again inside a new symmetric triangle (2). The price action repeated four times, excluding the current scenario (6) which has yet to mature.

A Closer Look at the Bitcoin Price

Let’s have a closer look at the same chart.

BITCOIN (BTC/USD) 4H | SOURCE: COINBASE, TRADINGVIEW.COM

As period 6 develops, bitcoin could form a smaller symmetrical triangle as it attempts to retest the falling wedge resistance to the upside (depicted as a dotted falling trendline). Meanwhile, the price would keep pressure on $3,430 to remain its interim resistance. Based on the previous price actions, bitcoin should continue its downside momentum. However, as we are reaching the apex of the falling wedge, the price should technically attempt a strong upside breakout action.

As we wrote in our previous analysis:

“Technically, a falling wedge pattern is a bullish indicator. It begins broadly at the top but squeezes as the asset moves lower while forming reaction highs and reactions lows that eventually converge. Upon closing in towards the cone’s apex, the asset undergoes a resistance breakout to find a new support area.”

Consequently, there is a strong chance for bitcoin to break above its wedge pattern on the next upside move. Traders should watch out for reversal indicators such as a doji — which occurs when a candle has an open and close at the same price — coupled with a spike in trading volume.

Conversely, an extended downside action would push the bitcoin price towards $3,100 – the current bottom level.


Source
Author: Yashu Gola 
Image Credit: Featured Image from Shutterstock. Charts from TradingView.

Do NOT dump your BTC, ETH, LTC – 3 Reasons Why – Do Not Panic

A $40 billion drop from the crypto market in a day – Why you shouldn’t still panic?

On Sept. 6, the crypto market lost almost $40 billion from its valuation in under 24 hours, exhibiting one of the steepest decreases in the previous three years.

In mid August, the digital currency advertise dropped to its yearly low at $192 billion, however it took seven days from Aug. 7 to Aug. 14 to record such an extensive drop in valuation.

Preceding Wednesday, during the time of August, Bitcoin demonstrated its largest amount of soundness since June of 2017, as specialists at Diar noted. From Aug. 8 to Aug. 26, the cost of Bitcoin remained moderately stable in the $6,000 area, before starting a late restorative rally over the $7,000 obstruction level.

3 Reasons you should not panic

1. There is not a specific 1 Reason for the decline – Stay safe from FUD

The biggest thing you need to realize while reading online news (“fake news”) is that the price decline is never due to a single reason. From Goldman Sachs delaying its trading desk, delay of Bitcoin ETF, China FUD, and India’s ban – Nothing has full control on the crypto industry, and has nothing to do with the sharp decline of BTC, ETH or any of your crypto.

2. Sharp Decline and Sharp Fall is “Normal” for the Cryptocurrency market

Have a look at the history of Bitcoin. Bitcoin price declined to $45 from $259.34, down 83% in April 2013. From $1163 to $152.40 in January 2015, down 87%.

Think of people who sold Bitcoin at $45.

 

3. Fake Volumes are controlling the market – They want you to Sell your Cryptocurrencies

Alex Kruger, a business analyst and a crypto trader, expressed not long ago that Bithumb, South Korea’s second biggest digital currency trade behind Kakao-run UPbit, said that more than $250 million worth of phony volume was made since Aug. 25.

He clarified that one gathering of traders has been exploiting Bithumb’s 120 percent exchanging charge payback, which can produce about $90,000 in net wage, with a $250 million day by day exchanging volume.

Straightforwardly or in a roundabout way, the strategy used by Bithumb has boosted wash exchanging that knocks up the day by day exchanging volume of the cryptographic money trade. The end result is a day by day net wage of $90,000 for a gathering of brokers and a huge increment in the every day exchanging volume of Bithumb.

In any case, while the strategy prompts a win-win circumstance for the two gatherings, it influences the worldwide digital money trade showcase adversely — as it decreases the genuineness of the universal exchanging volume of cryptocurrencies.

Source
Author: Nadja Eriksson
Image Credit