The payments processing company, Square, released a letter outlining in detail their financial outcome for Q3 in 2019. The sales of Bitcoin through the Cash App were shown to have increased by 245% relative to the same period in 2018. Additionally, sales have reached $148 million, an all-time high.
These numbers follow the pattern of growth for Bitcoin throughout the year. Both the network hash rate and the number of wallets have increased significantly. More specifically, the former reached an all-time high in October.
The price of Bitcoin, however, is undergoing a rapid decrease. We believe it will begin to reverse once it reaches the previous descending resistance line around $8600.
Also quite the reaction off of the top of the descending channel that has been relevant since the 14K top a few months ago. I find it interesting when price reacts predictably to areas with a confluence of support. pic.twitter.com/gkoLhwWZP6
— The Wolf Of All Streets (@scottmelker) November 8, 2019
However, he is using the logarithmic chart. Since the price has decreased slightly below the logarithmic line, we will use the regular chart instead.
Bitcoin Previous Resistance
The October 26 rapid increase cause the Bitcoin price to break out above the descending resistance line that had been in place since June 24.
Today’s decrease has caused the price to almost reach and validate it. This is a very common movement after breakouts.
Additionally, this area coincides with the 0.5 fib level of the entire upward move beginning in April.
Looking at the moving averages (MA), the price has just fallen below the 200-day MA, which had been offering support since the rapid increase of October 26.
The resistance line also coincides with the previous resistance area turned likely to support, further increasing the possibility that the price will validate the resistance line and move upward.
Therefore, this makes it a very likely area for the beginning of a reversal.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of TradingView, Twitter.
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