Cryptocurrency
Has Bitcoin Bottomed?
Last week Bitcoin made new yearly lows and sentiment across social media has been overtly pessimistic. It may be too early to suggest a potential bottom is in. However, there are a few bullish metrics which suggest we could be going higher in the near future. Yesterday, the stock market experienced a severe decline after […]
Last week Bitcoin made new yearly lows and sentiment across social media has been overtly pessimistic. It may be too early to suggest a potential bottom is in. However, there are a few bullish metrics which suggest we could be going higher in the near future.
Yesterday, the stock market experienced a severe decline after the Federal Reserve announced they would continue to raise rates into 2019. Major tech stocks such as Facebook, Amazon, and Apple were all down more than 3%. Surprisingly, Bitcoin remained resilient and held its support level at roughly $3.7k. Early this morning, Bitcoin rallied to a high of $4.1k before being rejected by resistance. If Bitcoin keeps going, it should have targets of roughly $4.1k and $4.5k later in the week. One bullish indicator is the fact that Bitcoin’s RSI has made a new lower high and is continuing to increase. This type of scenario is often followed by a sharp spike upward in price.
The chart below shows the Fibonacci resistance fan. Bitcoin has now broken through resistance at the 0.5 level but now faces strong resistance at 0.382. If Bitcoin can retain its upward momentum into the 0.382 Fib channel there should be enough momentum to push price to $4.5k in the short run.
The Gann fan chart below is also showing that a potential uptrend is eminent. A bounce off of the 3/1 level demonstrates Bitcoin’s current strength and is an indication that Bitcoin may continue to travel upwards in the 3/1 channel.
It is important to note that the family offices and investment firms who were going to sell Bitcoin for tax loss purposes have probably already done so. If the market dips as a result of XRP being ruled a security, traders should use this as a buying opportunity. Although Bitcoin has remained resilient after the Fed announcement, it may be difficult for Bitcoin to rally if the stock market has a rough time in 2019. Bitcoin has never existed during a US equities bear market and hopefully we will test the narrative of Bitcoin as a safe haven asset.
Disclaimer: I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the cryptocurrency market. The author of the article trades cryptocurrency.
Sources:
Charts from tradingview.com