After a brief run up beyond $9,400 Bitcoin has pulled back 2% and is languishing just above $9,150 now as the bearish trend gains momentum.
But some might say we haven’t been out of a bear market of late. Let’s take a look at some technical analysis to see what could be on the horizon for Bitcoin.
Bitcoin Technical Analysis – The Impending Triangle Breakdown
Looking at the daily chart, it’s make your mind up time for the Bitcoin price as it comes to the end of a symmetrical triangle pattern.
As we can see in the image below, the brief rally this week failed to break above the triangle resistance, while yesterday’s losses are currently testing the triangle support.
It could go either way. If the support holds, Bitcoin could march towards $10,000 again, but if support gives way, expect a bigger drop.
The main areas of support are $9,000, $8,800 and $8,600, and if support fails there, we will likely see a drop down to around $8,000.
Bitcoin Hasn’t Been Bullish For a While
While the daily chart is looking like it could go either way, the bears do seem to be gaining more momentum, but this is nothing new according to trader, @LimitlessXBT.
According to the popular trader, Bitcoin has been in a bear trend for over a year, even during the bounce back from the March capitulation,
‘Bitcoin hasn’t made a higher high in a full year, so per definition,’ claims LimitlessXBT. ‘It’s not a bull market. BTC has made lower lows and lower highs consecutively for a full year, so per definition, it’s a bear market.’
And with the recent high of $10,460 below the highs in February, it means Bitcoin is technically still and has been in a medium-term bear market.
The Bitcoin Bulls Are Coming
Valid points indeed from LimitlessXBT, but whichever charts you analyze, it’s hard to see how a bull run isn’t on the horizon.
There are many analysts and even more technical and fundamental signs that suggests the bulls are gearing up for a challenge.
In the short–term Bitcoin has formed a bullish divergence with its relative strength index. Divergences form when an indicator moves in the opposite direction of an asset’s price, which usually indicates a rally is likely.
And the bullish sentiment was echoed by Bloomberg’s Mike McGlone, who tweeted his belief that Bitcoin’s consolidation would lead to higher prices.
‘Volatility should continue declining as BTC extends its transition to the crypto equivalent of gold from a highly speculative asset,’ said McGlone. ‘Yet we expect recent compression to be resolved via higher prices.’
Bearish, Bullish? Which Way Next?
Bitcoin may have been in consolidation for the last few weeks, and it’s failure to break the daily resistance, is helping the bears gain a short-term psychological victory.
And whether Bitcoin hasn’t been bullish for over a year now really depends which patterns you look at.
But whether analysts are bullish or bearish short-term, you’ll be hard pressed to find someone bearish for even the medium term.
Author: Pablo Clarke
What is Bitcoin resistance?
In technical analysis, large round numbers are defined as “psychological resistance levels,” like $10,000 for bitcoin. Historical resistance levels are price points that have in the past acted as support or resistance.
How long does it take to mine 1 bitcoin?
On average, the time it takes for miners to mine BTC is 10 minutes. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
Who is the CEO of Bitcoin?
There is no CEO. There is no central authority that directs or controls Bitcoin. It was created by a pseudonymous programmer Satoshi Nakamoto, but he gave it up to the community, and now all decisions are made by the hundreds of thousands of miners and nodes who work for the Bitcoin network.
How many bitcoins are left?
There can only ever be 21 million bitcoins. At the time of writing, there are 18,422,856 bitcoins in circulation. There are 6.25 bitcoins minted roughly every 10 minutes, so that’s 900 every day. The amount of newly minted bitcoins is cut in half roughly every 4 years, in what is known as the halvening. The halvening will continue to take place until the last fraction of Bitcoin is minted in around the year 2140.