Bitcoin price currently flashing signs of overt weakness as it hovers around the lower boundary of its long-held trading range
Bitcoin price is currently a bit lower than yesterday’s price because the market-leading cryptocurrency is showing signs of extreme weakness. Especially when it moves around the lower boundary of its long-term trading range, analysts believe that this sideways trade will result in a downward movement.
BTC/USD 4 hours chart | Source: Tradingview
Bitcoin price flashes signs of weakness as indicators point to further downside
A recent technical indicator has been blinking for the first time in a few months, signaling potential imminence. The last time this indicator flashed, Bitcoin dropped to a low of $ 3,800 from a high of over $ 8,000 in just 48 hours.
A historical model also seems to indicate that Bitcoin may need to suffer some heavy losses before it can enter a new trend. That means there will be a decline in the $ 5,000 area that occurs before the start of a new parabolic cycle.
The next trend is likely to depend on Bitcoin’s reaction to $ 9,000. This level has been held as an important support for several times over the past few weeks, but a decisive break below could be all that is needed to spark a new bear trend.
If the speculators want to deny this excessive decline, they will need to push Bitcoin to the upper boundary of its trading range of around $ 10,000 and gain a foothold in the five-figure price area.
Earlier today, Bitcoin’s cloud indicator first appeared in red for several months. The last time this indicator changed from green to red, Bitcoin dropped by more than 50% in just a few hours. This signals that Bitcoin’s medium-term uptrend will soon come to an end.
Source: Teddy Chart via TradingView
According to cryptocurrency analyst TraderXO, Bitcoin’s previous market cycles tend to end with a fragile period. This phase seems to require Bitcoin to witness a sharp decline many times over a short period before it exits the bear market and begins a new parabolic cycle.
If the previous pattern repeats itself, it looks like the cryptocurrency could be positioned to drop to $ 5,000 levels in the near term.
There is still evidence that Bitcoin will enter a rally
A crucial on-chain signal that appeared at the start of three previous bull runs has just been seen. According to Blockchain analytics firm Santiment, an important on-chain signal just appeared: The MVRV Long / Short Differential indicator passed above 0% after a multi-month correction.
#Ethereum $ETH‘s MVRV Long/Short Differential is nearly back to even after a positive streak spanning back five months. MVRV is a measure of how much each coin holder paid for their coins and compares it to the current price of that given coin. If the ratio is above 1.0, then on pic.twitter.com/JulggDpXPj
— Santiment (@santimentfeed) October 22, 2019
The reason why this is important is that every time historical figures pass one, the protests have followed. In 2012, the data surpassed one before BTC increased to $ 1,000. In 2015, the data surpassed one before rising around 2,000% to $ 20,000. And after the bear market in 2018, the number surpassed one before the BTC rally to $ 14,000.
While there is evidence, Bitcoin may undergo a short-term correction. Specifically, Glassnode reported that miners are trying to liquidate large amounts of Bitcoin. These organizations are reducing BTC prices through CME, Bitfinex’s order book has been massively misleading to the sellers.
There is also an opinion from another analyst that Bitcoin is trading a “high time frame distribution” pattern.
You can also check Bitcoin Price here.
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