What Is Next for Bitcoin After the 50% Plunge?January 20, 2020
This week, the cryptocurrency space seems like in a roller coaster, one crypto asset may surge hugely and then decline the next days.
Bitcoin (BTC) surged above the $9,000 zone for the first time in 2020 as it breaks out the days of consolidation. At high on Saturday, BTC has reached the $9,200 value.
However, Sunday wasn’t a perfect day for the cryptocurrency asset due to sudden fell. Bitcoin collapsed 7%, from $9,150 high to $8,600 low. The said plunge has made the people around the crypto space assume for more pain in the next few days.
During the second half of the previous year, Bitcoin, along with other crypto markets, failed to deliver the best performances. In fact, the assets collapsed from $388 billion to $166 billion, which is a 50% drop.
Based on the downtrend in the previous seven months, crypto analysts stated that the confluence of signs suggests for a bottom in the market for cryptocurrency assets, especially BTC.
Should the Crypto Markets Worry for Another Crash of Bitcoin?
Many analysts expressed that there are clear signs for crypto bottom’s existence.
Over December 2019, Bitcoin remarkably exploded higher, making its way to 40% high after overcoming the $6,400 region. However, some analysts said that the crypto-asset would crash again.
According to seasoned crypto trader Rekt Tekashi, the current price action of Bitcoin tends to be the same to what have seen in mid-July 2018. That period is when the BTC has seen with a bear market breakout, resulting to a crash back down.
Using the three indicators, namely Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Guppy, the analysts compared the market structures of July 2018 and the current one, which looked very identical.
In the case that BTC will follow the path it took during July 2018, then this means for a flatline tat $7,000s before dropping to the level of $3,000 once again during halving.
Apart from Rekt Tekashi, another crypto trader said that the recent breakout of BTC is just part of the further drop. The trader has noted that the price action of Bitcoin since the $14,000 high back in June 2019 is reminding what have seen in the bear market in 2018. Both the market cycles were seen with an upward wedge-formed false breakout, downward price channel, signs of capitulation, and declining volume.
Is BTC Going to Be Bullish?
Apart from bearish arguments happening in the crypto space, some analysts lean bullish.
Based on crypto analyst Thrillmex’s tweet, Bitcoin rapidly tapped higher on the four-hour chart as it tapped the key support levels of $8,463 and $8,577. This result implies a long liquidity hunt or swing failure pattern.
Although the long bottom tapper is not a sign of a reversal, the crypto asset still managed to close the candle above the $8,463 and $8,577 supports, which indicates that the drop can be potentially a short-term correction. Then, everyone could expect a higher move once again.