Bitcoin [BTC] price logged one of the worst weekly candles last month with a 18.7% drop. Since October, the only positive rise in Bitcoin [BTC] was witnessed during the Xi Pump, which was another dead-cat bounce. Its safe to say that the last quarter of 2019 has been nothing but bearish.
The current bear market began in July as Bitcoin has failed to make a ‘higher high along with a lower low’ to signal the bulls. The maximum brunt of the bear was witnessed since September.
Furthermore, there is no confirmation of reversal in trend yet, just the beginning of accumulation with a slightly higher probability to the upside.
The present bear market from $14000 has lasted for about 170 days.
According to Tone Vays, a 53% correction from highs near $14,000 to $6425 is nearly adequate. However he is skeptical as the rise was over 300%. A 60-80% correction from a parabolic move is still on the cards.
Scams Vs. On-Chain Analysis
Fundamentally, the Xi-Pump and along with halving in next 6 months, November was looking forward to bullish scenario. However, the price retraces the pump completely, falling to a low of $6785.
The network has been witnessing a miner capitulation since November. The narrowing of the Bitcoin difficulty bands similar to Oct-Nov in 2018 could signal a bottom for the network.
Moreover, the halving event in May 2020 next year will further induce added difficulty which could possibly lead to another narrowing in the difficulty ribbon. While in the past the period has been fairly bullish for the price, the characteristics are significantly different this time.
The Market Value to Realized Cap Ratio is also testing an important support level. In the past, the ratio has been useful in signalling a bottom in price. Usually, the ratio is below 1 at those levels. Currently, the ratio is at 1.27, echoing with the sentiments of last year around Oct-Nov above $6000.
Nevertheless, according to expert on-chain analyst, Willy Woo who curates these charts, the on-chain turned positive a couple of weeks ago, and we could see a bullish effect on price soon. The mining industry is also witnessing a technological shift with new age miner flooding the markets.
However, the liquidation of scams continues to be the biggest threat for Bitcoin in 2020. As reported on CoinGape, analyst David Puell is especially clueless on the price action because of the potential continuation in liquidation of scams.
The weekly price action in December comprises of Doji, spinning tops and a ‘hammer’. This is could indicate accumulation or consolidation before a bullish reversal. Moreover, daily price moves have been made obscure due to the high volatility and high volume players in the futures market.
Do you think 2020 could bring back the bulls? Please share your views with us.
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