It was a crypto bloodbath. Double digit losses posted on a week-to-date basis coupled by gloomy predictions, Bitcoin (BTC) is suppressed. The path of least resistance in the short-term could be southwards but if bulls manage to clear the $7,300-$7,500 resistance zone, previous support, bulls may flow back. This is the opinion of one influential crypto analyst, LomahCrypto.
Not what you want to see on LTF.
Bearish retest imo. I'm not confident on a move up until we clearly reclaim that $7,300 area which could give way to a short-term bullish move. pic.twitter.com/AvasrrCPWW
— Loma (@LomahCrypto) November 23, 2019
Bitcoin HODLers Suffer
At the time of writing, it is evident that the market sentiment has shifted as Bitcoin prices treads below $8,000. In the last week, BTC has been obliterated by the greenback, losing a massive 15%. However, on the bright side, the coin is up against ETH, adding 2 percent.
Most noteworthy is that the stellar gains made after Chinese Premiere, Xi Jinping, announcement of China’s positioning as a leading hub for blockchain and distributed ledger technology have been completely reversed.
With market sentiment bearish and risk averse traders rushing to the exits, investors and traders are left in the limbo, wondering whether prices will falter going forward or become steady, even recovering yesterday losses.
Analysts are Split
Technically, analysts’ opinions are split. On one hand, there are permabulls, confident that yesterday’s losses marked the end of a bearish leg.
What could happen in the next few days, in their optimistic view, is BTC trading within a range before finally edging higher as bulls flow back in the direction of October trend.
All in all, the long-term trend is still fine, aside from a parabolic explosion earlier this year (which is an outburst to the upside).
Keeping the trend intact -> market is fine.
Onwards to $20,000-25,000 in 2020. pic.twitter.com/uednu3jgo4
— Crypto Michaël (@CryptoMichNL) November 23, 2019
Behind this reasoning is their citation of sharp trading volumes that accompanied yesterday’s candlestick and fundamental events scheduled in the next few months as Bitcoin halving and a struggling economy that can at any time slip to a recession. The uptrend, in their analysis, is intact.
It's important to note that, as Bitcoin slowly approaches maturity/saturation, its price uptrend will gradually slow down, which causes parabolic trendlines to fail. In other words, a violation of the trendline above won't be proof that the secular bull market in bitcoin is dead. pic.twitter.com/qa83X7UcKg
— Tuur Demeester (@TuurDemeester) November 22, 2019
On the other hand, bears predict further losses. Evidently, the break below Oct lows and the psychological $8,000 mark dealt a blow to buyers. And like bulls, losses below $7,500 were behind high trading volumes.
This alone is enough to justify a breakout. If bears pile up their position, shorting on every high, it appears that BTC would easily tumble to $5,500-$6,000 support area, in a retest of Q2 2019 lows.
Will the Bear Breakout Be Confirmed?
Over all, LomahCrypto’s view is plausible. A convincing reversal behind Nov 22 highs would push prices above $7,300 into the $7,600-7,000 zone.
The result will be a double bar bull reversal pattern fading yesterday’s candlestick, a sign of bears. On the flips side, a confirmation of yesterday’s losses thrusting prices below $7,000 will be more pain for HODLers.
Do you think Bitcoin bulls will flow back and lift prices to $7,300? Let me know your thoughts in the comment section below.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich