Bitcoin price action in the hourly chart of the BTC/USD pair is splitting opinion as candlestick arrangements send mix signals. BTC price is suppressed and in a temporary bear trend. While prices are levitating above the $6,500-$7,000 support zone, the sharp spike in trading volumes that temporarily lifted prices above $7,250 in the hourly chart may have trapped bulls in lower time frames.
Long Squeeze or End of Bear Leg
Because of this, observers are split. Some are confident that BTC could be in the last leg of a bear move.
Others are skeptical, arguing that the candlestick hinted otherwise, and that this was a long squeeze.
In their view, bears are getting started, and this was an early stage of a downtrend that could see BTC slide to new 2019 lows, perhaps retesting 2018 lows of 2018.
Bitcoin is Attractive
How Bitcoin withstands bear pressure often sets the trend in the cryptocurrency market. At the time of writing, despite regulators approving several derivative products and attracting the attention of institutions and deep-pocketed investors, Bitcoin price action is dull.
Volatility is subdued, and that consequentially affects price action and by extension aggressive traders who constantly yearn for opportunities to scalp. BTC price is down 4.50% in the past week but an analysis of BTC long and short positions paints a rosy picture in days ahead.
Accumulation: Bitcoin Longs on an Uptrend
From Bitfinex’s BTCUSD longs chart, it appears as if traders are accumulating. From late November, that is when BTC tumbled to new lows, breaking below $8,000, the number of BTCUSD long positions bottomed up and has been on a rise.
While this is yet to be reflected on the spot BTC/USD daily chart, it is highly likely that BTC will find support in days ahead and events in the hourly chart reveal short exits.
Bitcoin and crypto in general look extremely dangerous to me right now. I'm remaining mostly in cash, and only jumping in and out for scalp trades. Not financial advice, but I think there is much more downside to come.
— MAGIC (@MagicPoopCannon) December 12, 2019
It should be noted that the market is gripped by fear and most analysts are negative. However, from the above, contrarians could play out. In that case, weak hands who are liquidating and exiting their positions gift HODLers yet another opportunity to accumulate for cheap.
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