Bitcoin Bottom Isn’t In?
After plunging to $6,800 on Friday, Bitcoin (BTC) has been subject to some reprieve; the cryptocurrency now trades at $7,300, up some 8-odd percent from the bottom. While this bounce is somewhat positive for bulls, especially considering the historical importance of the high-$6,000s, most traders aren’t convinced that the cryptocurrency market has bottomed in this market phase.
According to a recent poll conducted in the public Telegram group of FilbFilb, a popular crypto asset analyst, that was responded to be some 2,400 individuals, a majority of Bitcoin investors believe that the bottom did not come in at $6,700. In fact, 60% of the eligible respondents said that they don’t think the bottom is in.
There are indicators that support this: analyst Byzantine General recently noted that the Relative Strength Index (RSI) — an oscillating indicator that tracks if an asset is overbought, oversold, or somewhere in between by factoring in the “magnitude of recent price changes” — for the one-day Bitcoin chart has hit 25, meaning slightly oversold.
The daily RSI rarely ever drops below 30.
It's currently at 25.The few times it drops below 30 it usually goes to 20.
The only exception ever was the December '18 bottom when it hit 10.#bitcoin pic.twitter.com/wfbsO73In8
— Byzantine General (@ByzGeneral) November 23, 2019
The significance of this: Bitcoin’s one-day RSI rarely drops below 30, and normally hits 20 when it does. With this precedent in place, there is a high likelihood that BTC will continue to head lower from current price levels.
This sentiment has been backed up by other technical indicators. FractalWatch recently noted that the plunge below $8,000 has resulted in some clearly bearish developments on Bitcoin’s weekly chart, namely that a key horizontal support has been lost and a Fibonacci Retracement level and uptrend line were nearly broken.
Key bitcoin level has been breached but it bounced of diagonal trend line.Failing to hold here would result in running some lower levels with 78% Fibonacci being most important one. pic.twitter.com/HLSLVpe6ez
— Fractalwatch (@Fractalwatch) November 24, 2019
With BTC looking poised to close under the horizontal level, it may get dicey for the bulls in the next couple of weeks.
Also, as Peter Schiff, a prominent gold proponent pointed out in a recent tweet, his analysis suggests Bitcoin could fall as low as $1,000. Per previous reports from Ethereum World News, the long-time cryptocurrency skeptic said that BTC is currently trading in the midst of an extended head and shoulders pattern that implies the asset will see a measured move to $1,000, which would mark an 85% drop from current levels, in the coming months and years.
Featured Image from Unsplash