Largely due to the depressed Bitcoin bulls, cryptocurrencies have been in a strong downtrend for the past few weeks. Accordingly, the price of BTC exerts a pressure on the key short-term support level, with a break below this level opens the door for more losses.
Interestingly, a prominent cryptocurrency-focused analyst is now noticing that Bitcoin’s recent price action is very similar to the 2014-2015 bear market activity. That could mean significant losses for the coming weeks and months before it establishes a long-term bottom.
Bitcoin plummets below $ 7,000 – Will the bull protect this critical support level?
At the time of writing, Bitcoin is trading around the $ 6700 mark with a decline of more than 7%, marking a large decline from the weekly high of nearly $ 9,000 and a significant increase in the price momentum that caused when it failed to maintain the milestone of $ 10,000 at the end of October.
Bitcoin has found noticeable support in the area above $ 6,000 in the past few days, but it is unclear whether this support can be sustained as BTC tests this level again in the next few hours.
TradeX0, a popular analyst on Twitter, explained in a recent tweet that he believes BTC is positioned for a movement to the $ 5,000 region in the short term, where the next major support level of it. He noted:
“$BTC Weekly Outlook: 7 weeks in and the 5k levels I believed the price would trade at looks to be coming to fruition. Looking for any significant swing shorts around the low to mid 7’s – before trading towards the range lows and fill in the inefficient gap.”
$BTC – Weekly Outlook
7 weeks in and the 5k levels I believed price would trade at looks to be coming to fruition.
Looking for any significant swing shorts around the low to mid 7’s – before trading towards the range lows and fill in the inefficient gap.
After that lets see pic.twitter.com/3EGeXFZ6TO
— TraderX0 (@TraderX0X0) November 24, 2019
In the 2018 bear market, $ 6,400 is the price that BTC maintained the longest so it could bottom out and repeat that pattern. The weekly chart is quite uncomfortable and closes below $ 7k suggesting lots of losses ahead.
Analysts are eyeing the support levels of around $ 5,800 to $ 6,200 as the weekly candles cannot close above $ 7,300.
$btc weekly
close above 7.3k -> targets 7.9k; 8.35k (decent short entry) (MA50/100 held this way)
close below 7.3k -> 5.8-6.2k (decent DCA MTF longs)
I still rather zoom out and play the big picture? pic.twitter.com/YcB09P3Gzq— Crypto₿irb (@crypto_birb) November 24, 2019
This move has pushed Bitcoin price below the 50-week MA for the first time since April when it had just thawed from the crypto winter. The 200-week MA, which provides the support during that crypto winter, is currently hovering just under $ 5k and retesting this is no longer a problem.
Trading sentiment is massively discounted at the moment, according to Nuggets News CEO Alex Saunders.
Is there a fractal pattern from 2014 that repeats trouble for BTC?
Adding to the reason for Bitcoin’s current price drop is that its current ability to exhibit the same price action as seen in the 2014 bear market, this could mean that significant losses are imminent.
TraderX0 also pointed this out in a tweet, told followers that there are clear similarities between current price action and seen a few years ago, maybe cause trouble for BTC’s next move.
‘Yeah probably was nothing… Don’t worry about it.”
$BTC – Yeah probably was nothing…
Dont worry about it pic.twitter.com/R76nU83HU1
— TraderX0 (@TraderX0X0) November 24, 2019
Is $ 6000 a long-term bottom?
Bitcoin price seems to be about to bottom out. A confluence of support areas shows that the bottom will be near $ 6000.
Yesterday’s decline did not allow investors to enter the market. On November 22, Bakkt achieved a new ATH of $ 13.4 million. This happened through the processing of 1863 Bitcoin contracts.
Therefore, if Bakkt reaches such a level in a bearish market, the next bull run may yield extraordinary numbers.
When the bull market can begin, trader and analyst Filb Filb tweeted the only chart he believes is best to predict current market movements. He is using a descending channel which shows price bounces above the support line.
Source: Filb Filb
Looking at the volatility of Bitcoin, we can actually see a descending channel formed from the June 24 high. Due to the presence of some wicks, the support and resistance lines may follow slightly different slopes.
In addition, outlining the number of waves we can see that prices may lie in the fifth and final wave of the 3-3-5 correction.
A correction near $ 6000 may be completed, at the support line of this channel and the previous support area.
Source: TradingView
The goal of $ 6000 also coincides with the long-term logarithmic support line that has been in place since 2011. There is a confluence of support from both the stream and the right channel at $ 6000.
Looking closely at the recent move, we can see that the price has found support above the 50-week MA.
While a drop to $ 6000 will bring the price below this MA line but still above the 200-week MA. We can see a similar scenario in January 2019 when the price bounced at the support line and the 200-week MA, exactly at the same level.
Bitcoin price today. Source: Coinmarketcap
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Read more:
- Despite The Falling, Bitcoin Hodlers Still Receives 2700X ROI For 8 Years
- Bitcoin Bottom Maybe Near When The MAs Cross But $ 6.8k Will Be Key