Bitcoin (BTC) could fall at least 75% from here. The chances of that happening are higher than they have been before. The parabolic run up that we saw since December, 2018 seems to have come to an end. Bitcoin (BTC) is known for declining in the same manner that it shoots up in. We do not have to go very far in history to see that. This happened just during the parabolic rally of December, 2017. The price declined and erased most of its gain and on top of that it took its time which means there is not going to be another bull market in a long time. Sure, we might see the price bottom around June or July of 2020 but we would still be a long way from the next bull run.
If we take a look at the weekly chart, we can see that the NVT indicator is flashing a sell signal. In addition to that, the price is trading in a rising wedge and it remains below a strong trend line support turned resistance. On top of all of that, the price has faced a strong rejection at the 38.2% fib extension level just as it did during the previous cycle. When the price began its downtrend below the 38.2% fib extension level last time, we saw it decline 75.30%. It is pertinent to note though that the price declined 70% prior to that. If we compare the first decline with that of the decline in the ongoing cycle till December, 2018, we can see that it declined more than that this time. BTC/USD declined 83.43% during the first downtrend in this cycle. This means that its second downtrend could also be higher than the second downtrend of the previous cycle which would bring the price close to our target range of $1,200-$1,800.
If we take a look at the daily chart for BTC/USD, we can see that it has just broken below a small rising wedge. The trend line support for this wedge could be tested as resistance if the price rises higher but we do not see it happening. The purple line on the chart corresponds to a strong resistance level on the weekly time frame. The price has closed below this level for the past two weeks even though it managed to rise above it before the weekly close. Bitcoin (BTC) is at an extremely vulnerable point. It makes no sense to see why anyone would be buying or holding at current levels expecting further upside. Certainly, the price could rise another 10% or even 20% from here, but is it really worth it? Investing is all about risk/reward and the risk reward here is just not worth it.
There are so many catalysts that could bring the price down. There is the Tether/Bitfinex controversy as well as the US government getting ready to crackdown on cryptocurrencies. President Trump recently tweeted criticizing Bitcoin (BTC) among other things. Some people take this as a bullish sign which is completely beyond my comprehension. All it is going to take is shutting down one big exchange like Bitfinex and then the show will be over before anyone can sell. There is nothing wrong with investing in Bitcoin (BTC) or other cryptocurrencies but we need to be aware of the risks and what the right time to buy and sell is. In every market, the simplest thing to do is to buy low and sell high to make money. If you do the opposite, you will get the opposite results.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 7991. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
As part of the Bitcoin exchange rate forecast, a test level of 8200 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 7260. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at 8420.
Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 8540. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In case of breakdown of the lower border of the Bollinger Bands indicator bands, one should expect acceleration of the fall of the cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019 implies a test level of 8200. Further, it is expected to continue falling to the area below the level of 7260. The conservative area for selling Bitcoin is located area of 8420. Canceling the option of falling cryptocurrency will be a breakdown of the level of 8540. In this case, we can expect continuation growth.
Bitcoin re-enters $8,000-zone, but what is its upside potential? – Confluence Detector
- BTC/USD went up from $7,998.50 to $8,077.50 this Thursday.
- The daily confluence detector shows two healthy resistance levels to overcome on the upside.
Following two straight bearish days, which took the price below the $8,000-zone, BTC/USD is on the course to recovery. Bitcoin had gone up from $7,998.50 to $8,077.50 this Thursday before it improved further to $8,087.40 this Friday. The hourly BTC/USD chart shows us that the market found intra-day resistance at $7,943.15 before it bounced up to $8,075. Since then, the price trended horizontally for a bit, negotiating with the $8,090 resistance line. The bulls managed to rally together to break past it and go up to $8,110, before correcting itself to $8,087.40.
BTC/USD daily confluence detector
The daily confluence detector has two healthy resistance levels at $8,190 and $8,260. $8,190 has the five-day Simple Moving Average (SMA 5) and one-week Fibonacci 61.8% retracement level. $8,260 has the SMA 100, one-day Pivot Point resistance two and one-day Bollinger Band middle curve.
On the downside, there is a support level of note at $8,065, which has the SMA 5, SMA 50, SMA 200, one-hour Bollinger band middle curve, one-day Fibonacci 38.2% retracement level and one-hour previous low.
Bitcoin could become store of value, as institutional interest increases
Institutional interest in Bitcoin has seen a significant rise in 2019, as several derivative financial products on top of Bitcoin have flooded the market. Active exposure of these investors to the digital asset realm has brought back the debate about whether Bitcoin is the new “store of value.” According to Grayscale’s managing director Michael Sonnenshein, there has been a certain shift in perception for sure.
Sonnenshein appeared on ‘The Scoop‘ recently to discuss the impact of institutional investor’s exposure to the digital asset class. The managing director of the firm believed that although Gold has been the standard store of value for centuries, and it made sense in the physical age, but given the rapid growth of the digital monetary age, Bitcoin for sure is challenging to become the new store of value. He explained,
“It is now nearly 2020 and we’re starting to ask investors with this question which is, what constitutes a store of value? It historically has been gold but that may have made more sense for a physical age. As we are in fully immersing ourselves now in this digital age perhaps gold doesn’t hold up as much as it once did as that store of value and perhaps investors need to think about a digital store of value such as Bitcoin.”
Institutional investors hold the key for Bitcoin and any other digital asset to gain mainstream adoption, and as of today they are more aware and learned about Bitcoin and its potential as an investment than ever before. More importantly, these investors are using Bitcoin as a hedge fund and store of value to diversify their investment portfolio as well as make quick capital gains on their investment.
The increasing interest of institutional investors is evident from the fact that GrayScale registered its highest gain in the last quarter with over $250 million raised from the investors, Binance has registered the highest daily volumes of over $700 million from its Binance futures platforms. Bakkt has launched its futures contracts recently while CME’s futures contracts year-to-date volumes have seen a significant rise over the past year.