So, given the recent volatility in the markets and the unexpected (for people not following Zerononcense/CryptoMedication) price action of Bitcoin, it appears that there is no review that would be better-timed than this one.
So let’s get into it, shall we?
Let’s just go ahead and start by recapping the events of the last few days to start off with:
As we can see from the chart above, the price has dropped approximately 15% in the last week alone which is pretty substantial, all things considered, for Bitcoin.
The price movement is something that everyone is aware of, but few understand the reason for it. So, let’s go ahead and recap from a few of our prior price analyses.
Descending Triangle Formation
As we mentioned in a prior price analysis here
on TradingView (www.tradingview.com/...et-Has-Just-Started/), the price of Bitcoin appeared bound to continue to decrease for a few reasons. One of those reasons was the descending triangle formation on the chart.
While imperfect, the horizontal line at the bottom of this chart at around $6k did hold as a pretty firm resistance point for quite some time.
Let’s look at the overhead downtrend resistance as well:
In addition, there was a major burst of volume to accompany the breakout south of this long-term support.
Also worth noting is that, at this point, this is the first time that the price for Bitcoin has remained in the $5k region for longer than 24 hours.
If you took a look at some of the charts above, you probably saw that there were periods of time in which the price of Bitcoin had dipped below $6k, but then quickly recovered.
At this point, the price has been in the $5k region for nearly 48 hours since the initial drop down.
Catalysts for the Drop in Bitcoin’s Price
One major theory (fundamental analysis) is that the impending ‘hash war’ in the Bitcoin Cash community helped to accelerate the drop in price.
These fears were exacerbated even further by speculative rumors that began circulating the community that individuals would begin ‘unloading’ massive amounts of bitcoins (thus depressing the price) in order to fund the ‘hash war’ among Bitcoin Cash miners.
The veracity of these claims has yet to be confirmed publicly or via concrete on-chain analysis, but there’s a possibility that this may have impacted the price as well simply because there were individuals in the community that believed it to be true.
Of course, as shown above, technical analysis of Bitcoin’s price chart also indicated that such an event was bound to happen to sooner or later as well.
What to Expect in the Future
The question that many traders are asking themselves at this point is, ‘What should we expect now?’
This has been rightfully demanded of the Zerononcense brand in particular, since we took the pleasure of letting the general crypto community know that we anticipated this drop several months ago as well as the specific placement of the drop too.
Therefore, we’d be remiss if we did not take this opportunity to do a bit more analysis on the price of Bitcoin to ascertain where it may travel from this point.
So, in order to do so, we will go ahead and look at the weekly chart resolution.
Weekly Chart Resolution for Bitcoin
Above is the chart for Bitcoin on the weekly resolution.
None of the trendlines that were produced on the Bitcoin chart have been altered or moved in the slightest.
As one can see, the trendlines look even more accurate on the weekly resolution.
Now, let’s look at some important indicators here.
Exponential Moving Average (EMA) for Bitcoin
As we can see in the chart above, the exponential moving averages on the chart are at the following values:
EMA-12 = $6,542
EMA-26 = $6,934
EMA-50 = $7,018
EMA-100 = $5,953
EMA-200 = $4,156
There are few things that to take note of here:
1. The EMA-50 is greater than the EMA-26 and the EMA-12, which is very bearish.
2. The EMA-50 recently crossed over the EMA-26 on the weekly (before the major drop in price), which should have been another sign of impending ‘doom’ in terms of price action.
3. The EMA-26 is greater than the EMA-12, which is bearish.
4. Currently the EMA-100 is still well above the EMA-200
5. And the EMA-12 is still above the EMA-100, but not by much. The difference between the two values is less than $600 at this point, which shows that the price action for Bitcoin has been extremely bearish.
Also, its worth pointing out that:
One of the more important things to note in this entire EMA analysis though is the fact that the price has now officially crossed below the EMA-100 on the weekly chart.
The chart above shows the price of Bitcoin crashing through the $6k support, which was already bolstered by multiple different re-tests throughout the entirety of 2018 up to this point.
When accounting for this plus the EMA-100 (which is now resistance), $6k may be a price point that is difficult for Bitcoin to break above for quite a while.
Next Major Point of Support
While it is tempting to look at the EMA-200 as the immediate ‘bottom’ support, we must also consider the possibility of an intermediate EMA support, which is the EMA-150.
Currently, the EMA-150 is hanging at approximately $4.9k.
This is just below the psychological support at $5,000 but its not implausible at all, especially given the recent price action.
Zerononcense Double Guppy Indicator
If you’re confused about this one, just know that it trades in a fashion similar to the Donchian channels (however, this version is modified).
The ‘orange’ part in the center of the indicator’s channels signify where the ‘normal’ price action is based on a pre-specified lookback period. Going beyond that, when the price touches the northern or southern part of the channels, that signifies that it is at an ‘extreme’, and a bounce is usually likely from that point.
Here’s what we can see for Bitcoin thus far on the weekly:
There is absolutely no guarantee that there will be a ‘bounce’ from this point and it is possible that there are several more bars that push the price of Bitcoin downward as the week continues.
This has happened before on Bitcoin:
Thus, this is just a good indicator that there may be an impending reversal in price action (similar to the Donchians).
Again, this is the weekly resolution, so there is a substantial amount of data in each candle that must be accounted for vs. the daily resolution or any smaller time frame.
Zerononcense Reversion Ribbon V2
Even at this point in time, the Reversion Ribbon V2 has yet to provide definitive data on the most recent move for the weekly resolution.
This is because, comparatively, the price action (in terms of raw dollars) that was experienced recently still dulls in comparison to the price action for Bitcoin roughly a year ago.
Visual Support Points on the Weekly Resolution
The chart above depicts two major support points.
The first one is the $5.5k support point, which we’ve already justified with a multitude of reasons before.
Second support point can be found at $4.5k. This does not mean that we are omitting the $4.8k-$4.9k support point that we mapped out earlier (based on EMA indicators).
This support point was determined based on prior price action (spanning back to the summer of ‘17). Therefore, it remains to be seen whether $4.5k holds as a support (if it comes to that).
Fibonacci Levels
For the last part of this weekly resolution analysis, we’re going to go ahead and take a look at the Fib Levels for the weekly resolution.
Above are the Fib Levels that we’ve drawn for the weekly resolution.
These were drawn from the price of $200 (yes, that low) on September 2015 up to the most recent high observed in December 2017 on the weekly resolution.
The $200 price point was chosen to be the price bottom for the Fib Levels because it reflects the range of the bottom before Bitcoin went on a near-linear run up to its height in 2017.
Let’s go ahead and isolate the points where the Fib Levels have proven to be reliable ‘bounce’ points for the price of Bitcoin.
Convention dictates that the price could eventually head toward the 78.6% retracement point.
The 78.6% retracement point might be at the $4.2k mark, which is a further depreciation of -22.39% from where the price is currently.
Again, there is no guarantee that the price will eventually head here, but that is where the underlying Fibonacci Support can be found at (for the 78.6% retracement point) on the weekly resolution.
The good news here, however, is that the price would more than likely bounce from this point and perhaps begin its long, upward track north toward a new ATH at some point in the future.
Conclusion
Any and all indicators, theories, and analytical standpoints on Bitcoin indicate that it will continue to head south over the long-term.
Rather than being exhausted, it appears that the bears are now just warming up (hence the name of the former price analysis, ‘The Bear Market Has Just Begun’).
The good news is that there more than likely won’t be too much drawdown from the point that the price is currently at to the proverbial ‘bottom’ (localized low) that everyone is waiting for.
As always, there is the possibility that this analysis proves to be entirely wrong and the price action behaves unexpectedly. So, regardless of one’s trading strategy hedging correctly is absolutely imperative.
Disclaimer: Nothing written about should be construed, perceived or accepted as financial advice. This is not written in advocacy of any personal finance strategies. Your decisions are your own and the author assumes zero liability for the outcome of those decisions. The author has zero conflicts of interest currently to disclose and is not currently an owner of Bitcoin or any other rival currencies at this point in time in accordance with SEC regulations and guidelines.
So let’s get into it, shall we?
Let’s just go ahead and start by recapping the events of the last few days to start off with:
As we can see from the chart above, the price has dropped approximately 15% in the last week alone which is pretty substantial, all things considered, for Bitcoin.
The price movement is something that everyone is aware of, but few understand the reason for it. So, let’s go ahead and recap from a few of our prior price analyses.
Descending Triangle Formation
As we mentioned in a prior price analysis here
on TradingView (www.tradingview.com/...et-Has-Just-Started/), the price of Bitcoin appeared bound to continue to decrease for a few reasons. One of those reasons was the descending triangle formation on the chart.
While imperfect, the horizontal line at the bottom of this chart at around $6k did hold as a pretty firm resistance point for quite some time.
Let’s look at the overhead downtrend resistance as well:
In addition, there was a major burst of volume to accompany the breakout south of this long-term support.
Also worth noting is that, at this point, this is the first time that the price for Bitcoin has remained in the $5k region for longer than 24 hours.
If you took a look at some of the charts above, you probably saw that there were periods of time in which the price of Bitcoin had dipped below $6k, but then quickly recovered.
At this point, the price has been in the $5k region for nearly 48 hours since the initial drop down.
Catalysts for the Drop in Bitcoin’s Price
One major theory (fundamental analysis) is that the impending ‘hash war’ in the Bitcoin Cash community helped to accelerate the drop in price.
These fears were exacerbated even further by speculative rumors that began circulating the community that individuals would begin ‘unloading’ massive amounts of bitcoins (thus depressing the price) in order to fund the ‘hash war’ among Bitcoin Cash miners.
The veracity of these claims has yet to be confirmed publicly or via concrete on-chain analysis, but there’s a possibility that this may have impacted the price as well simply because there were individuals in the community that believed it to be true.
Of course, as shown above, technical analysis of Bitcoin’s price chart also indicated that such an event was bound to happen to sooner or later as well.
What to Expect in the Future
The question that many traders are asking themselves at this point is, ‘What should we expect now?’
This has been rightfully demanded of the Zerononcense brand in particular, since we took the pleasure of letting the general crypto community know that we anticipated this drop several months ago as well as the specific placement of the drop too.
Therefore, we’d be remiss if we did not take this opportunity to do a bit more analysis on the price of Bitcoin to ascertain where it may travel from this point.
So, in order to do so, we will go ahead and look at the weekly chart resolution.
Weekly Chart Resolution for Bitcoin
Above is the chart for Bitcoin on the weekly resolution.
None of the trendlines that were produced on the Bitcoin chart have been altered or moved in the slightest.
As one can see, the trendlines look even more accurate on the weekly resolution.
Now, let’s look at some important indicators here.
Exponential Moving Average (EMA) for Bitcoin
As we can see in the chart above, the exponential moving averages on the chart are at the following values:
EMA-12 = $6,542
EMA-26 = $6,934
EMA-50 = $7,018
EMA-100 = $5,953
EMA-200 = $4,156
There are few things that to take note of here:
1. The EMA-50 is greater than the EMA-26 and the EMA-12, which is very bearish.
2. The EMA-50 recently crossed over the EMA-26 on the weekly (before the major drop in price), which should have been another sign of impending ‘doom’ in terms of price action.
3. The EMA-26 is greater than the EMA-12, which is bearish.
4. Currently the EMA-100 is still well above the EMA-200
5. And the EMA-12 is still above the EMA-100, but not by much. The difference between the two values is less than $600 at this point, which shows that the price action for Bitcoin has been extremely bearish.
Also, its worth pointing out that:
One of the more important things to note in this entire EMA analysis though is the fact that the price has now officially crossed below the EMA-100 on the weekly chart.
The chart above shows the price of Bitcoin crashing through the $6k support, which was already bolstered by multiple different re-tests throughout the entirety of 2018 up to this point.
When accounting for this plus the EMA-100 (which is now resistance), $6k may be a price point that is difficult for Bitcoin to break above for quite a while.
Next Major Point of Support
While it is tempting to look at the EMA-200 as the immediate ‘bottom’ support, we must also consider the possibility of an intermediate EMA support, which is the EMA-150.
Currently, the EMA-150 is hanging at approximately $4.9k.
This is just below the psychological support at $5,000 but its not implausible at all, especially given the recent price action.
Zerononcense Double Guppy Indicator
If you’re confused about this one, just know that it trades in a fashion similar to the Donchian channels (however, this version is modified).
The ‘orange’ part in the center of the indicator’s channels signify where the ‘normal’ price action is based on a pre-specified lookback period. Going beyond that, when the price touches the northern or southern part of the channels, that signifies that it is at an ‘extreme’, and a bounce is usually likely from that point.
Here’s what we can see for Bitcoin thus far on the weekly:
There is absolutely no guarantee that there will be a ‘bounce’ from this point and it is possible that there are several more bars that push the price of Bitcoin downward as the week continues.
This has happened before on Bitcoin:
Thus, this is just a good indicator that there may be an impending reversal in price action (similar to the Donchians).
Again, this is the weekly resolution, so there is a substantial amount of data in each candle that must be accounted for vs. the daily resolution or any smaller time frame.
Zerononcense Reversion Ribbon V2
Even at this point in time, the Reversion Ribbon V2 has yet to provide definitive data on the most recent move for the weekly resolution.
This is because, comparatively, the price action (in terms of raw dollars) that was experienced recently still dulls in comparison to the price action for Bitcoin roughly a year ago.
Visual Support Points on the Weekly Resolution
The chart above depicts two major support points.
The first one is the $5.5k support point, which we’ve already justified with a multitude of reasons before.
Second support point can be found at $4.5k. This does not mean that we are omitting the $4.8k-$4.9k support point that we mapped out earlier (based on EMA indicators).
This support point was determined based on prior price action (spanning back to the summer of ‘17). Therefore, it remains to be seen whether $4.5k holds as a support (if it comes to that).
Fibonacci Levels
For the last part of this weekly resolution analysis, we’re going to go ahead and take a look at the Fib Levels for the weekly resolution.
Above are the Fib Levels that we’ve drawn for the weekly resolution.
These were drawn from the price of $200 (yes, that low) on September 2015 up to the most recent high observed in December 2017 on the weekly resolution.
The $200 price point was chosen to be the price bottom for the Fib Levels because it reflects the range of the bottom before Bitcoin went on a near-linear run up to its height in 2017.
Let’s go ahead and isolate the points where the Fib Levels have proven to be reliable ‘bounce’ points for the price of Bitcoin.
Convention dictates that the price could eventually head toward the 78.6% retracement point.
The 78.6% retracement point might be at the $4.2k mark, which is a further depreciation of -22.39% from where the price is currently.
Again, there is no guarantee that the price will eventually head here, but that is where the underlying Fibonacci Support can be found at (for the 78.6% retracement point) on the weekly resolution.
The good news here, however, is that the price would more than likely bounce from this point and perhaps begin its long, upward track north toward a new ATH at some point in the future.
Conclusion
Any and all indicators, theories, and analytical standpoints on Bitcoin indicate that it will continue to head south over the long-term.
Rather than being exhausted, it appears that the bears are now just warming up (hence the name of the former price analysis, ‘The Bear Market Has Just Begun’).
The good news is that there more than likely won’t be too much drawdown from the point that the price is currently at to the proverbial ‘bottom’ (localized low) that everyone is waiting for.
As always, there is the possibility that this analysis proves to be entirely wrong and the price action behaves unexpectedly. So, regardless of one’s trading strategy hedging correctly is absolutely imperative.
Disclaimer: Nothing written about should be construed, perceived or accepted as financial advice. This is not written in advocacy of any personal finance strategies. Your decisions are your own and the author assumes zero liability for the outcome of those decisions. The author has zero conflicts of interest currently to disclose and is not currently an owner of Bitcoin or any other rival currencies at this point in time in accordance with SEC regulations and guidelines.
Trade closed: target reached:
Target reached.
Telegram = t.me/librehash
Twitter = twitter.com/librehash
Website = librehash.org
GIt = git.librehash.com
Docs = docs.libreahsh.com
Twitter = twitter.com/librehash
Website = librehash.org
GIt = git.librehash.com
Docs = docs.libreahsh.com
