2019-11-25 17:08 |
The Bitcoin price has reached a very significant support area created by the 0.5 Fib level. According to our analysis, it is very close to reaching a bottom — having possibly reached one near $6600.
During the week of November 17-24, the Bitcoin price decreased by roughly 20 percent. While the cause of the decrease is not known for certain, some have suggested that the regulatory moves by China, which can be considered anti-cryptocurrency, caused this substantial drop.
It is certainly possible that the reaffirmation of China’s positive stance towards blockchain but negative stance towards cryptocurrencies could have been the cause of the rapid decrease.
Cryptocurrency analyst and trader @davthewave stated that even though the Bitcoin price has decreased considerably during the last week, initiating a wave of panic in the market, it is right at the 0.5 Fib level of the entire upward move.
Thought there is an air of panic, this is Bitcoin normal [the panic is normal also]. BTC is super-volatile. It has now corrected 50%. I've compressed the time in this chart to provide a visual of log growth time. As they say, good things take time. pic.twitter.com/ZS75aySk6v
— dave the wave (@davthewave) November 25, 2019
Due to a previous fractal, he has previously stated that the correction is likely to end at the 0.5 level. Let’s look at this fractal more closely.
Bitcoin’s Previous FractalLooking at the logarithmic Fib levels, we can see that the Bitcoin price has reached the 0.5 Fib level of the entire move from $3300 to $13,700.
Due to the position of the long-term support line, we could see the Bitcoin price trading inside a range between $6600-$8000 (0.5-0.618 Fib) until early 2020, when the 0.5 Fib level will coincide with the aforementioned support line.
Afterward, it should continue to increase at the rate predicted by this channel.
The fractal mentioned in the introduction compares the movement beginning in August 2016 to the current one beginning in December 2018.
The December low coincides with the previous 0.5 Fib level.
Also, if the current move takes half the time of the previous one, which seems likely due to the time when the top was reached we would see another touch of the support line in early 2020, as outlined in the image above.
This would also coincide with the 200-week moving average (MA), another similarity with the previous correction. The Bitcoin price has never traded below this MA.
Therefore, in early 2020, we could have a confluence of support at $6500, found by the long-term support line, 200-week MA, and the 0.5 Fib level.
Rate of IncreaseThe 0.5 Fib level has previously been used to identify the top. Also, @davthewave stated previously that he did not have faith in the parabolic move that took us to $13,700.
Never trusted this parabolic bounce… https://t.co/OPxjuc20Gq
— dave the wave (@davthewave) November 25, 2019
The reason for this was the rate of increase. In order to evolve into a “serious asset class for investors,” BTC should not have a parabolic rate of increase.
Looking at the entire channel, the 0.5 Fib level was near $14,000. Therefore, a decrease followed by a more gradual upward move would be more fitting for BTC — which is what is occurring currently.
To conclude, the Bitcoin price is likely very near a bottom, due to a confluence of support. We could see the price trade in a range until the first few months of 2020 before the rate of increase intensifies.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Shutterstock, TradingView.
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The post Bitcoin’s Correction May Soon Be Over, Analyst Argues appeared first on BeInCrypto.
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