Konstantin Kaiser | Dec 05, 2018 02:21PM ET
BTC Technical Analysis
As of right now, Bitcoin is continuing its roller-coaster ride. Since its all-time-high at $19716 on December 17, 2017, Bitcoin dropped by more than 82 percent, all the way down to $3429. This was by no means unexpected, as the The Relative Strength Index (RSI) showed bearish divergences and oversold regions. After an incredible rise from just $0.5 to $32, Bitcoin fell by almost 94 percent back to roughly $2 in 2011, which was still a net increase of 400 percent. In 2013 Bitcoin declined by more than 81 percent and just a year later it fell by 93 percent as a result of the famous MtGox hack.
XBT/USD DAILY CHART
XBT/USD DAILY CHART
However, the sharp increase in volume during the most recent price drop is a very bearish sign. Additionally, Bitcoin is potentially going to form a bear flag if it stays at the current support and forms a higher low. The high of that wave would be located between $4792 and $5017, which is exactly where Bitcoin will face a very strong resistance.
XBT/USD DAILY CHART
BTC/USD WEEKLY CHART
While all of the above is indicating a very bearish development for Bitcoin’s price in the upcoming months, we should also take a look at the indicators.
BTC/USD WEEKLY CHART
BTC/USD WEEKLY CHART
BTC/USD WEEKLY CHART
BTC/USD WEEKLY CHART
BTC/USD DAILY CHART
BTC/USD MONTHLY CHART
To conclude, there are numerous arguments for a continuation of the bear trend for bitcoin and very little for an upward movement in the upcoming weeks. However, this is only from a technical point of view, as the fundamental analysis might come to different conclusions.
While diverse industry experts, like Justin Tabb, CEO and Founder of Amplify Exchange, stated: “based on 1,000 iterations of our Monte Carlo simulation, Bitcoin is likely to consolidate around the $4,000 price level until the beginning of 2019 and it’s likely that Bitcoin continues its long-term bull run, with higher prices heading into the summer of 2019.
For Bitcoin to retest the all-time-high, blockchain solutions need widespread adoption and institutional money needs to enter the market. In short, there needs to be a catalyst. Bitcoin ETF’s and physically settled futures contracts will be huge catalysts for the market since they inherently reduce the supply in circulation. Less supply and more demand yields higher prices. It’s only a matter of time.”
It might turn around quicker than originally assumed, with a pending decision on the SolidX and Vaneck ETF and an upcoming future and digital asset trading platform in late January 2019. With that being said, Bitcoin might surprise technical analysts and begin its upward movement earlier than expected.
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