Bitcoin Hammered, Yet Analysts Expect BTC to Hold Strong
Bitcoin (BTC) has been absolutely hammered over the past two days. In fact, some 36 hours ago, it was trading at $10,200; now, the cryptocurrency is sitting snug at $9,500.
While some say that now is a poor time to buy BTC as it could crash lower, a number of analysts have asserted that Bitcoin may not fall much lower, making now an optimal time to accumulate.
In a recent tweet, Willy Woo, a partner at Adaptive Capital, argued that Bitcoin is currently not as bearish as some may expect, pointing out that it has just rebounded off its 128-day moving average, which sits at $9,350.
While the prominent analyst did admit that the cryptocurrency has been “overheated” over the past few weeks, he notes that its part of BTC’s “historical personality” for it to flirt with the aforementioned moving average “many times during a bull market to stay grounded”.
Indeed. The chart above shows the (at least) seven times last bull run (2016 to 2017) that Bitcoin collapsed to its 128-day moving average to either bounce to fresh all-time highs or stabilize before grinding higher. And if you look further back into Bitcoin’s price history, you can see multiple other occasions where it made contact with that level and headed higher in succession.
That’s not all. As reported by Ethereum World News yesterday, PlanB, an analyst from traditional markets that has delved down the Bitcoin rabbit hole, opined that “Bitcoin is still looking strong” per his one-month Relative Strength Index (RSI) reading.
Indeed, the current movement in the RSI chart seen below is eerily reminiscent of mid-2016, when Bitcoin consolidated after its first bull run after 2015’s crash to sub-$200 levels. His chart suggests that Bitcoin may not head much lower than current levels, and may also break to the upside to finish 2019 strong.
The strong RSI and the historical 128-day moving average bounce aren’t the only historical precedents that are supportive of Bitcoin. Just recently, analyst Filb Filb posted the chart below to his Trading Journal Telegram chat. In it, it shows Bitcoin is clearly posting more lower lows, all while the two indicators below have been trending higher — a bullish divergence that has previously led to recoveries in the price of BTC.
All these analyses indicate that Bitcoin isn’t doing as poorly as many on Crypto Twitter on saying.
Photo by Andy Holmes on Unsplash