On Dec. 18 Bitcoin price thrilled investors by providing a $1,000 move from $6,430 to $7,450 after bouncing off the descending channel trendline near $6,400.
Since topping out at $7,452, the price has painted a lower daily high and the 6-hour chart shows that momentum is fading as the price range tightens and moves closer to the 20-SMA. Currently, the price is being held up by support at $7,100 and if this gives way, a drop to $6,800 to $6,600 is likely.
From the weekly timeframe, down to the 4-hour timeframe, Bitcoin price action is bearish and needs to hold $6,685 to $6,274 to avoid a drop to $5,300 where the daily chart shows investors interest.
Anyone familiar with Bitcoin and crypto knows that the price action is driven by more than just chart technicals.
Some analysts cautioned that Bitcoin is overdue for a strong squeeze on long positions and others attempted to decipher why long positions continue to rise in the face of increasingly bearish price action.
A general theory is that investors believe Bitcoin price will not fall far enough to liquidate leveraged longs and with the 2020 halving event approaching investors believe they have more to gain from being long rather than short.
According to market analyst Philip Swift, the indicator can be used to identify periods where Bitcoin is over and undervalued "Relative to its fair value".
Willy Woo's Bitcoin NVT Signal also shows Bitcoin's price dropping closer to its realized value at $5,591 and the NVT signal is currently at 64.6 with 45 representing oversold conditions.
All of this suggests that Bitcoin still has more bearish days ahead but the macro view of the digital asset's price action remains encouraging, or perhaps one should say "Exciting."
In the meantime, swing traders and long-term investors could consider placing a buy order at $5,500 just in case; and day traders will continue to watch for Bitcoin price to press above $7,300 and take another shot at the resistance at $7,600.
Bitcoin Price: 2 Key Metrics Hint at Big Dip Before Next Bull Market
gepubliceerd op Dec 22, 2019
by Cointele | gepubliceerd op Coinage
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