Daily Bitcoin Update 5/30/19: TA & McAfee Freedom Coin

Daily Bitcoin Update 5/30/19

Daily Bitcoin Update: Its been a slow week in Bitcoin’s price action. The calm before the storm is emerging and we are preparing for an epic move which has the potential to determine the macro trend for the next six months. If Bitcoin can break above the 0.382 fibonacci level at $9.4k, we will face resistance at the $10k-$12k price channel. After that, there are no prior support or resistance levels. Therefore, Bitcoin could easily make new highs if enough media attention ensues. Conversely, if price falls below critical support at $8.2k, a 30-40% pullback will be expected. It is important to remember that Bitcoin travels through market cycles much faster than traditional stocks and indexes such as the S&P 500. In cryptocurrency bull markets, 30-40% drops are considered normal. Many newcomers to the cryptocurrency space will panic sell and miss parabolic moves as a result.

Historic Pullbacks in Bitcoin Bull Markets

The chart above is a perfect illustration of why crypto is entirely different from traditional markets. During the 2016-2017 bull run Bitcoin experienced 7 different pullbacks of 40%. In fact, the largest pullback was 71% and there were 2 more pullbacks of 60% or higher. This kind of price action is common during Bitcoin bull markets and they serve as ideal buying opportunities. Therefore, a 2019 bull market should be similar. Considering Bitcoin is up 126% since the beginning of 2019, it is very likely we will experience at least a 30-40% pullback in the near future.

Daily

Looking at the daily chart above, the sequential indicator has flipped to a red 1 and Bitcoin is still in neutral territory. The moving averages continue to look bullish after creating the golden cross last month. However, moving averages are a lagging indicator and therefore it is possible that price has topped after creating the golden cross as a result of past bullish activity.

4 Hour

After hitting a red 9 yesterday, the sequential indicator on the 4 hour chart has flipped to a green 2. Currently, the 4 hour chart is in bullish-to-neutral territory.

Weekly

Currently, Bitcoin’s weekly chart is making a doji candle. In technical analysis a doji candle is characteristic of a trend reversal. If Bitcoin’s weekly candle closes at $8.7k then the doji candle will be confirmed and a trend reversal will be expected. Additionally, Bitcoin’s sequential indicator will make a green 9 next week which will also indicate a potential reversal pattern.

Cryptocurrency News

Kin, an ICO currently worth $32 million, is facing off against the SEC in an upcoming legal battle. The ICO raised $98 million and currently has a $5 million legal fund in preparation for their defense. The SEC wants to determine whether the Kin token passes the Howey test. Kin feels that their token should not be considered a security, however the SEC may feel differently. It will be interesting to see how the case unfolds. The SEC has already targeted many other ICO projects, SALT lending being one notable example. Kin’s outcome may be a microcosm of how the SEC deals with large scale ICOs in the years to come.

In other news, John McAfee is shilling a new cryptocurrency. His Freedom Coin will launch in fall of 2019 as McAfee will run in the upcoming presidential election in 2020. While being a long shot, McAfee plans to use his platform to advocate the use of cryptocurrencies to his followers. Freedom Coin will not be the first cryptocurrency McAfee has endorsed. Earlier in 2018, McAfee endorsed an ICO named Skycoin by tattooing their logo on his back. Ever since, McAfee has denounced Skycoin as a low quality project which he is no longer in favor of.

Conclusion

Daily Bitcoin Update: Not much has changed since yesterday’s price analysis. The bull flag pattern is still in play, however, the longer price remains at $8.7k, the less likely the bull flag is to occur. The most critical resistance level remains at $9.4k while critical support remains at $8.2k. A break outside of these levels will likely determine the momentum of Bitcoin’s macro trend for the next 4-6 months.

Overall, the cryptocurrency market is an excellent market for beginner traders because it moves at such a faster pace than traditional markets. If you were a trader following Bitcoin since 2017, you have already seen an entire market cycle. On the other hand, most money managers following the S&P 500 have been in a bull market for arguably 10 years and have dealt with little market adversity.

Disclaimer: I am not a financial advisor. Nothing in this article should be considered financial advice. The author of the article hodls Bitcoin.