Bitcoin (BTC) is currently trading at just below $8,600 following a 1% drop in price since Monday.
Despite the fall in price, BTC has managed to form a strong level of support around this level, just above its 200-day EMA.
Bitcoin has been consolidating since last month after price spiked from $7,500 to over $10,000, before retracing to the $9,000 range.
Although some technical analysts believe we’re in for more bearish momentum, I argue it’s the other way around. If BTC makes another higher low on the way to $10,000, I will be pretty convinced we’ve entered a new bullish period.
Will BTC recover back to $10,000 and above soon?
Let’s take a look at Bitcoin’s chart.
As you can see from the chart above, BTC is now back trading between its 200-day and 50-day EMAs. In addition, all the EMAs seem to be moving in an upwards direction, which means we should expect BTC to hold at least above $8,500 where the 200-day EMA is currently sitting.
After the huge Bitcoin pump we saw in late October, where the price of BTC increased over 40% in the space of 24 hours, it seems the market has now stabilised.
Last week, I said I expected BTC to find a bottom near its 200-day EMA and that Bitcoin would bounce to around $10,000 soon. The first prediction has come to fruition, so let’s see how long it takes until we see a major breakout towards $9,000 and above.
After last month’s massive pump, it’s clear new investors and traders are taking over BTC’s price action.
The current Bitcoin trend
History shows us that BTC is prone to huge drops between 30% and 40% during bull seasons. Therefore, I don’t advise that you fight the trend, but surf it for as long as possible.
Last week, I underlined that within the next three to five weeks, we could see a major reversal after a period of serious accumulation by ‘hodlers’.
However, for the time being, not only has Bitcoin reversed its downwards trend, I argue BTC will reach $12,000 by the end of 2019 if we continue to see strong gains.
Volume, which had dropped from a peak of $27 billion earlier in the year to just over $15 billion last month, is now back to the $20 billion range. At the time of writing, it is about $21 billion.
Bitcoin’s market dominance has also slightly decreased about 1% since early October, from 66% to 65%.
As veteran traders and investors usually say, smart money “buys when there’s blood on the streets”. Currently, I’m waiting for another minor drop in price to make new entries. These drops won’t last forever, and if you think traditional markets are currently on a massive bull run, I wouldn’t be so sure the trend won’t reverse.
How can the markets continue to push higher throughout the year after the ECB’s recent rate cuts, the continuous share buybacks from huge corporations, or the inverted bond yield shoving investors away towards riskier assets?
In addition, repo market activity – as in loans from central banks to commercial and investment banks – has spiked to new monthly records. That adds up to another signal of weakness among most banks.
Current live Bitcoin pricing information and interactive charts are available on our site 24 hours a day. The ticker bar at the bottom of every page on our site has the latest Bitcoin price. Pricing is also available in a range of different currency equivalents:
US Dollar – BTCtoUSD
British Pound Sterling – BTCtoGBP
Japanese Yen – BTCtoJPY
Euro – BTCtoEUR
Australian Dollar – BTCtoAUD
Russian Rouble – BTCtoRUB
In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On 3rd January 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
More Bitcoin news and information
As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.