WHAT HAPPENED TO BITCOIN?
Bitcoin’s price has been falling for as long as we can remember, from its all time high in the $20 000 region. This bear market has lasted over a year! That’s 12 months with prices free-falling, to the point that many at this point have completely lost interest in it.
Many counted it as a bubble, putting it in the same basket as the Tulip Bubble of 17th-century Holland. As one NY Times writer put it, Holland’s Tulip bulbs created a wild, speculative rush that quickly disappeared, leaving behind nothing but pretty flowers and wrecked bank accounts.
Thus far Bitcoin seems to have pretty much the same track record. However before we totally write Bitcoin off, let’s look at the charts and numbers and see what they might be telling us.
WHAT IS THE DATA SAYING?
Firstly, according to Google Trends (based on World Wide Web searches) since the beginning of the 2nd quarter of 2019, interest in Bitcoin has been rising. This is an interesting point to note given that historically the rise in the price of Bitcoin has been inextricably linked to the increasing interest of the world in it.
Secondly Technical Analysis shows that Bitcoin is no longer in a bear market. Price has
- broken the downtrend on the D1 timeframe;
- also broken the support turned resistance zone at $5700-$6000 and briefly retested it.
- bounced from its 200-week moving average, breaking out from its first-quarter trading range, denoting the start of a price recovery in the long term
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WHAT ARE THE EXPERTS SAYING?
Economists, Technical Analysts and other experts have also weighed in on Bitcoin’s price action, one such expert who called Bitcoin crash also shared similar bullish sentiment. In a note Rob Sluymer, a technical strategist at Fundstrat explained that he believed Bitcoin was currently in the early-stages of a long-term recovery that will continue on throughout the year.
That was at the very beginning of May 2019 before prices had broken the $6k mark. Another expert, popular economist and trader, Alex Kruger tweeted
“$BTC now in bull market territory after an intraday blow-off top. R: 7000, 8000. S: 6400, 6000. Old levels not as valuable, hence why above 6400 only looking at round numbers as major resistance. Hourly volume at Bitmex was the 2nd largest ever after Sep/5/18,”
$BTC now in bull market territory after an intraday blow-off top.
R: 7000, 8000
S: 6400, 6000Old levels not as valuable, hence why above 6400 only looking at round numbers as major resistance.
Hourly volume at Bitmex was the 2nd largest ever after Sep/5/18. pic.twitter.com/ANmIIDJVf1
— Alex Krüger (@krugermacro) May 11, 2019
WHAT AM I SAYING?
Bringing my own thoughts on the matter, my technical analysis of BTC/USD on D1 Timeframe indicates that a major cup and handle may have been forming, over the last 6 months from the drop late 2018.
I’ll be waiting to see what price does at 7420-8000 zone, if we face strong bearish resistance, I’ll be watching to see if the support at 5726 holds and if it does, begin to accumulate buy positions, looking for a move to the upside.
A drop or consolidation from the 7420 zone would form the handle of the cup and on our way back up if we break the 7420 zone we should see the continuation of a bull rally all the way to at least $10k.
TO BUY OR NOT TO BUY?
As far as I’m concerned, winter is not coming. Winter is over, the long night has come and gone. Since we’re now in bull market territory, long-term investors can buy and in the spirit of Game of Thrones HODL! There’s very little chance of price tanking below $3k anytime soon as price has clearly bottomed out.
Intraday traders looking to scalp should look to buy the dips, but I must warn that your entry point will be crucial, at the time of writing we’re likely to see price retrace soon as RSI is showing that we’re now extremely overbought.
To those who called the last Bitcoin bull run a bubble or compared it to the Tulip Mania, you may be in for a rude awakening. The behaviour of Bitcoin’s price may be better compared to the dawn of the Internet than flowers that wither away. Digital gold is here and from the looks of it, it is here to stay!
Would love to hear your thoughts on this post or answer any questions you may have – if you have any. Feel free to drop your comment in the comment section below or connect with me on FB, Tw or IG @theittai