Bitcoin Isn’t in The Clear Yet
Over the past week, Bitcoin (BTC) bulls have finally begun to relent. Earlier this week, BTC hit $7,450 just days after hitting $9,100 — a drop of around 20%. Despite this, bulls have begun to show their faces once again, pushing BTC back over $8,050 in the past 24 hours. As of the time of writing, most digital assets are up 5% in the past 24 hours, all while some altcoins, namely Litecoin, NEO, and Bitcoin SV, embark on double-digit runs.
BTC may not be in the clear yet though. As analyst Dave The Wave recently pointed out, the Moving Average Convergence Divergence (MACD) on Bitcoin’s one-week chart is still where it was when BTC hit $9,100. This could be read as a sign that the recent retrace under $8,000 could just be the start. What’s more, the indicator reads as it did back in early-2016, which was when the cryptocurrency market embarked on a short-term parabolic run (like we just saw), and then collapsed.
With this rally being “twice as steep, in half the time” compared to the one seen in late-2015 and early-2016, Dave seems to be implying that BTC still has room and time to fall further. He isn’t the first to have thought so. In a recent note, Adamant Capital wrote that “should $9,000 prove [to be] the top”, which has seemingly occurred with Monday and Tuesday’s bull-scaring price action, a 2012-esque correction could be seen. This would result in Bitcoin trading in a range “between $6,800 and $7,680”, which is a 27% to 44% retrace of the upside rally.
A Silver Lining
In Dave’s above tweet, the analyst didn’t give an exact prediction as to where Bitcoin could fall, but he has hinted at certain prices previously.
Per previous reports from copy trade history platform, if BTC follows the parabola seen below without breaking above or below it, the asset could slowly retrace to near $5,000 flat by late-2019. What supports his claim is the fact that at around $5,000, there exists a logarithmic support line, the bottom of the parabola, the 0.618 Fibonacci Retracement level of BTC’s rally from $3,150 to $9,100, and Bitcoin’s long-term 1400-day simple moving average.
If there’s a silver lining here it’s this: While Bitcoin still has room to fall from here, especially considering historical precedent, BTC will unlikely establish new cycle lows in said retracement. Thus, investors holding BTC for the long haul shouldn’t have much to worry about for now, but short-term traders might need to tighten up their stop losses and deleverage their holdings.
Title Image Courtesy of Thor Alvis Via Unsplash
The post Bitcoin (BTC) Chart Still Shows ‘Overbought’ Signs, Should Investors Be Worried? appeared first on copy trade history platform.