Bitcoin Showing Some Strength, Though Too Soon for Dec 2017 Revival.
By now most Bitcoin hodlers and enthusiasts would be well aware of the previous Bitcoin price surges and the price corrections that follow. The 2014 price surge experienced a correction close to the price where the surge began (0.786–1 retrace), and was followed by a pro-longed period of relatively uneventful price action:
With this in mind many hodlers have come to accept that time and patience are crucial ingredients for what they hope would be the next trip to the moon. The questions on everyone’s minds are now simply:
What is the bottom? 6k is showing some strength though 3k would be what many traders shorting bitcoin would project.
When will the trip to the moon arrive? The 2014 recovery suggests years of relatively drama free price movement.
6k VS 3k BOTTOM
Bearish traders would be waiting to see Bitcoin fulfill historic price patterns and correct close to the 3k price level. However Bitcoin has shown some signs of strength since it’s fall from 20k. The first sign was the breaking out from the strong downward trend line formed from the 20k and 17k peaks which went from resistance to support line.
The next and more recent sign has been the development of a 6k support line as the Bitcoin price failed to make lower lows:
The price behavior of not forming lower lows forms a psychological support, though the history of price movements in 2014 shows that there is plenty of time for a price correction closer to 3k. With such sideways price action, either scenario of a return to a price greater than 10k followed by a re-test 9k, or a price drop to 3k both appear equally possible.
NEXT TRIP TO THE MOON
I still haven’t figured out what was the single biggest driver of the 20k price: FOMO or price pumps from USDT (probably both). With that in mind, major price movements have often been a product of something extreme. Whether it be pure fear or exchange hacks and crashes, as time goes on the sensitivity of the market to information that has previously been published and experienced softens. This can be evidenced by the reduction in market reaction by Bitcoin fork announcements that followed after Bitcoin Cash.
The market requires something new not previously experienced, and in the world of cryptocurrencies there is more than enough room for “first to be experienced” events. To that end, possible developments that may lead to strong upward price action relate to the mass adoption by institutional investors and the significant progress in the area of cryptocurrency regulation. These will play key roles in forming an environment by which potential “moon” type price movements could occur, and will go hand in hand as regulatory bodies lay the roads by which institutions can take part in what is often described as a social movement.
WHERE ARE WE NOW
Putting 2014 and 2017 peaks roughly together, it’s easy to see the price movement similarities.
As they sometimes say, history doesn’t repeat but rather rhymes. The sound of the beat is in tune with 2014, though bearish predictions to 3k have not been realized as fast as short position traders have hoped, and bullish price movements “to the moon” are probably not expected at such an early stage.
Newbies should be wary of the many bullish technical analysts publishing charts with reversal patterns and over simplified upward trending price channels heading to 100k. 20k was a psychological barrier that took place in an environment that is different to today, and for price momentum to build up for a break above 20k, the environment needs to be right for such a setup and will also require a significant event or development.
(**This information is for educational purposes only and is not advice for investments or trading **)