Bitcoin course: 30 percent movements possible – market view

The Bitcoin price could really get going again at the end of the year. In the past, movements of up to 30 percent awaited us. The market analysis by the Bitwala Trading Team.

As expected in our previous issue, the reversed Head & Shoulders pattern led to a bullish continuation and briefly reached the $7,800 level. However, the further rise was stopped by the 20-day EMA, so the Bitcoin price was outside and below the EMA band. The Bitcoin price has since dropped 9 percent and is now supported by the 61.80 percent Fibonacci retro-reacement level. It is important that the bulls stay above this level or at least within the Golden Pocket range of 0.65 to 0.61.

 

Bullish signals and bearish trends

There is an important event in the weekly time frame: the 50-day moving average was above the 100-day moving average. The last time in May 2016, this led to a Bitcoin price increase of 950 percent. This could have been an immense bullish sign if the bearish divergence on the weekly chart had not been the opposite. Furthermore, according to the weekly EMA band, we are still in the bear market and bulls would need a lot of strength to break through the bearish formation.

 

Bitcoin futures long positions rose impressively over the past week. There is still some room up but the parabolic run makes Bitcoin more susceptible to a long squeeze. This occurs when a Bitcoin price drop pushes traders to sell their long positions – which would drive the price further down in a cascade of sales.

 

Looking at the year-end picture as a whole, the Bitcoin price rose 100 percent on December 3, 2018, exactly a year ago. Nevertheless, the 2019 high for the year ($13,800) is only 30 percent lower than the all-time high of 2017. Historically it is known that BTC is quite volatile in the last month of the year. Since 2015, the Bitcoin price has moved 30 percent each year in the last month. We will keep a close eye on the market and report on key events over the month.