After the ATH of $19,891 in Dec 2017, Bitcoin has made two lower highs of $17,174 and $12,985. The lower high of $12,985 was made after making a low of $9,005. This signals a downtrend! Reversal of downtrend would happen when the last lower high is taken out.
Bitcoin is finding a strong support at psychological levels of $10,000, after hitting a high of $12,985. The price action seems bullish and the volatility has died down in the last two days. If it breaks the lower high of $12,985 then it would resume the uptrend and the road ahead in scaling new ATHs shall be much more smoother and faster.
However, if it doesn’t break the resistance of $12,985 then the market could continue it’s downtrend and the next support would be around $7,500-8,000 levels.
The markets have shown signs of recovery though not a strong one. If the current uptrend continues past $13,000 which is a strong resistance for Bitcoin at the moment, it would smoothen out the road ahead for next ATHs.
1) We saw a parabolic rise in bitcoin and total market cap of crypto currencies in Q4 of 2017 which is fundamentally incorrect. Such trends generally don’t last long.
2) In the weekly chart bitcoin has touched the middle bollinger which could act as major support. In the past also it has acted as a major support.
3) Many weak hands (positions) have been flushed out, which is again a great sign for the markets
4) Bitconnect is now out of the way, so now markets are healthier than before. But the bigger demon (Tether) is yet to get demolished. Maybe we should leave it for the next round of correction.
More than technicals, if there is basis in the technology, then only it will survive parabolic moves. However personally I would panic if markets go below $7,500. A recovery from $10,000 would be much more smoother.
About the Author: Chandan is a veteran trader and wealth manager in stock markets having more than a decade long experience. Currently he is actively trading cryptocurrencies over the last one year. He is the Head of Trading in Tradelab Software Private limited.
Author’s Disclaimer: Technical analysis is full of ifs and buts. Opinions expressed should not be taken as an investment advice. Please do your own due diligence before investing in cryptocurrency markets.
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