Bitcoin Price’s Monthly Chart Looks “Hopeless”; Can Bulls Save the Day?
Over the past few weeks, Bitcoin (BTC) has found itself consolidating in the low-$7,000s, holding this key support region as bears threaten the cryptocurrency’s demise. While this consolidation has been bullish, in that selling pressure has abated, a number of analysts say that the asset’s long-term outlook remains decisively bearish.
For instance, trader CryptoHamster noted that the one-month Heikin-Ashi chart of Bitcoin is looking “hopeless,” with the candles flipping red, thus exhibiting clear signs of a long-term downtrend. The chart implies that BTC’s latest downtrend is not over yet, for bulls will need to do much to reverse the bearish Heikin-Ashi candles that are being formed.
It isn’t only Hamster who is drawing attention to harrowing signs on Bitcoin’s long-term charts.
Popular trader Rampage recently noted that Bitcoin is showing signs that it is in the midst of a repeating cycle, one seen twice in the asset’s history.
The cycle is marked by a parabolic and rounded blow-off top, consolidation near said top, a strong drop to test a historical uptrend, a secondary top formed below the primary blow-off top, then a collapse under the aforementioned historical uptrend to enter a bear market phase.
Should this pattern be of current relevance, Bitcoin is in the midst of forming a secondary top and, as such, is thus poised to break through the historical uptrend line at ~$5,000 to enter a potentially multi-year-long bear phase.
This observation can be corroborated by the application of the Wall Street Cheat Sheet “Psychology of a Market Cycle” chart to Bitcoin’s long-term price trajectory demonstrates that the market is in a “complacency” phase, and is on the verge of entering a deep depression, one that could bring the cryptocurrency well under where it is even now
Despite the aforementioned confluence of bearish technical factors, there are a few fundamental factors and on-chain metrics that suggest that BTC isn’t doomed after all.
According to a recent thread posted by TradeBlock, Bitcoin’s 2019, price action aside, was a record year in terms of the most basic of on-chain metrics: transaction count, transaction volume in USD, and hash rate.
#Bitcoin has had a record 2019 with transaction count, transaction volume (USD equivalent basis), and hash rate reaching new all time highs this past year. pic.twitter.com/hSGXyeq4JR
The growth in transaction count seemingly stems from the growing adoption of the SegWit solution, allowing for more transactions to be put into each block, while the aggregate yearly Bitcoin transaction volume was aided by the price action over the past few months, which has forced exchanges and traders to use the network as a medium of payment.
That’s not to mention that the Hash Ribbons, a custom indicator tracking the health of Bitcoin’s mining ecosystem, has printed a “buy” signal on the daily chart for the first time since mid-January of this year, which was prior to the 330% rally that brought BTC’s price to $14,000.
Featured Image from Unsplash
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.