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Analysts are Still on Edge About Potential Bitcoin Collapse Despite Momentum

Save for news that Bitcoin (BTC) news publication CCN is shutting its doors, Monday was quiet for the crypto industry. But, BTC rallied anyway, quickly rushing past $7,800 and $8,000 in rapid succession during the wee hours of Monday morning.


Related Reading: Bitcoin Becomes Money, One Satoshi Now More Valuable Than Some National Currencies

Due to the strength of this sudden move, which came after days of relative weakness and non-action, optimists believe that BTC is ready to hit play, resuming its previous uptrend. There is a multitude of analysts, however, that are still on edge, waiting patiently for a pullback to even lower levels than $7,500.

Despite $8k Pop, Bitcoin Exudes Weakness

Since hitting $9,100, Bitcoin hasnít been its bullish self. As analyst Bagsy aptly put it in a recent tweet, ďthe trend is bearishĒ.

He notes that when Bitcoin tried to rally past $8,000 on Monday, it got rejected by the 21 half-day (12-hour) moving average a key short-term technical level and the Point of the Control (which acts as resistance) on BTCís volume profile.In fact, BTC wicked to that level, and then quickly collapsed lower, almost as if the move higher didnít happen.

This doesnít mean that BTC will spike lower from here, but it does accentuate the bears are still in control, even after Mondayís pop higher.

This isnít the only harrowing sign. Analyst RJ Killmex explained earlier this week that Bitcoinís three-day chart is currently experiencing a bearish divergence on its Relative Strength Index (RSI), marked by higher prices and a downtrend in the trend indicator. Whats more, the Moving Average Convergence Divergence (MACD) is about to flip red and cross below equilibrium.

As to where Bitcoin could land if it falls that is many are eying the low-$6,000s or even high-$5,000s. Teddy, a known trader, explains that Bitcoinís weekly chart is currently waiting with bated breath for a drawdown.

He ventures that ďany trend, regardless of the bias, has to retrace and confirm the directionĒ by touching a key moving average. In this case, he believes it is the 21-week exponential moving average, which BTC tapped four times in 2017ís rally.

With there being 70 days since Bitcoin last touched this key level, which is visited around every three months, Teddy suggested that a retrace to $6,000 or so is entirely possible.

Twitter commentator TraderX0 has echoed this analysis but used a different moving average to make a similar point. He noted that during Bitcoinís last long-term uptrend, BTC touched its 100-day EMA seven times. This continual support along a single technical trend is what defined 2017s trend. The thing is, this time around, Bitcoin has yet to even flirt with the 100-day exponential moving average.

And just as the 21-week EMA sits around $6,000, so too does the 100-day, corroborating the necessity for a return to that level.

This move isnít only likely, but purportedly would be healthy for Bitcoinís long-term trends. Parabolic and logarithmic curve expert Dave The Wave recently pointed out that if his parabolic models hold up, BTC will gracefully descend to the $5,000s to $6,000s in the coming months, thus fulfilling the assetís ten-year logarithmic growth curve.

Chart Courtesy of Dave The Wave on Twitter

Waiting on the Sidelines

While there are more short to medium-term bears than bulls, many analysts are seemingly telling their followers to wait on the sidelines due to the lack of conclusive trendsetting. Prominent analyst Josh Rager explains that Bitcoin is currently trapped between $7,900 and $8,200, adding that $7,900 to $8,000 is the ďmost accumulated range since May 13th.Ē

This could mean that barring thereís a breakout in either direction, BTC may be settling down for some consolidation, making it foolish to make trades. Commentator CL explains that there are a number of reasons why Bitcoin is poised to range for a while, and may not see any drastic price action: BTC is above its 50-week moving average, the asset often consolidates after a parabolic trend, and volumes remain strong.


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The post Analysts are Still on Edge About Potential Bitcoin Collapse Despite Momentum appeared first on NewsBTC.

11.06.2019 / 05:50 35
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