Will Bitcoin: USD/BTC (BTC=X) drop further soon?

By December 19, 2019Bitcoin Business
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Will Bitcoin: USD/BTC (BTC=X) drop further soon?

Will Bitcoin: USD/BTC (BTC=X) drop further soon?

Bitcoin (BTC) is currently trading at around $7,050 following a 6% decrease in price since last Monday.

Over the past 24 hours, BTC is down close to 1%.

BTC broke most of its support levels during a huge sell-off in November as the coin looked to be free falling.

However, the world’s largest cryptocurrency found support near $6,700 and bounced back up to $7,800 before consolidating around $7,500 last week.

During the weekend though, BTC took another dip that pushed price below key volume-resistance levels.

Will BTC drop further soon?

At the time of writing, Bitcoin is still on a short-term bearish trend. Since price has been consolidating for the last few days, I now expect a significant price movement sometime within the week.

I’m more inclined to think we’ll see a move to the downside, even though there’s a chance for a massive pump in the event fresh cash comes into the market.

Since the massive bull market that took Bitcoin close to $14,000 earlier in the year, the coin has been dropping in value following a downtrend that was only broken in late October when price surprisingly broke through a number of key resistance levels (around the 200-day, 50-day, and 20-day EMAs).

Bitcoin is still around 30% down from October’s high of $10,350 and close to 50% down from the yearly high in June.

In addition, BTC has broken below its 200-day EMA, and all its EMAs have now crossed to the downside – another bearish signal.

If the $6,700 level was to be broken, the next stop for BTC, if the volume profile is to be believed, is just above $5,000.

The current Bitcoin trend

History shows us that BTC is prone to huge drops between 30% and 40% during bull seasons. Therefore, I don’t advise that you fight the trend, but surf it for as long as possible.

Last week, I underlined that within the next three to five weeks, we could see a major reversal after a period of serious accumulation by ‘hodlers’. We’re still in an accumulation phase and the current downtrend is proof.

Volume has increased around 12% to $17 billion. This means we could be starting to enter the end of the short-term accumulation cycle and price action could either pump or dump.

For the time being, as mentioned above, there’s a chance it can go either way. As long as price continues to record lower lows, that’s a bearish sign. I’m patiently waiting for a reversal signal.

Will the trend reverse soon?

As veteran traders and investors usually say, smart money “buys when there’s blood on the streets”. I’ve been saying for the past month that I’m waiting for major drops to make new entries. Moments like these are highly welcomed and appreciated.

I strongly believe Bitcoin to be a long-term store of value, especially as traditional markets continue to show weaknesses.

How can the markets continue to push higher throughout the year after the ECB’s recent rate cuts, the continuous share buybacks from huge corporations, or the inverted bond yield shoving investors away towards riskier assets?

In addition, repo market activity – as in loans from central banks to commercial and investment banks – has spiked to new monthly records. That adds up to another signal of weakness for the general economy.

In conclusion, investors and traders should pay attention to the overall economic panorama, as it will most likely be a major catalyst for worldwide BTC adoption.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 7,961.60.

The projected upper bound is: 7,332.53.

The projected lower bound is: 6,328.89.

The projected closing price is: 6,830.71.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 30.4562. This is not an overbought or oversold reading. The last signal was a sell 16 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 32.17. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 20 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -160.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed up 1.950 at 6,881.750. Volume was 68% below average (consolidating) and Bollinger Bands were 56% narrower than normal.

Open     High      Low     Close     Volume___
6,867.0006,945.6006,763.7106,881.750 25,626
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,168.35 8,029.47 9,332.24
Volatility: 26 40 74
Volume: 75,570 80,403 85,047

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX BTC= is currently 26.3% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 33 periods.

Bitcoin (BTC) is currently trading at around $7,050 following a 6% decrease in price since last Monday.

Over the past 24 hours, BTC […]

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