Bitcoin [BTC] price went through another roller coaster with a 4% followed by an equivalent drop in less than 8 hours. On Wednesday, the price jumped from $7150 to a high of log a high at $7780, marking an increase of 8.8%. The sell-off later began at an even faster rate, recording two long bullish candles on the hourly chart.
Mati Greenspan, an expert financial and crypto market analyst, humorously described the formation that seems to have deviated from the Bart-Simpsons pump and dump pattern. He tweeted,
This one seems more like a Marge to me… pic.twitter.com/lv7vl7TfVc
— Mati Greenspan [not trading advice] (@MatiGreenspan) December 4, 2019
Nevertheless, while the pattern is comical, the price volatility isn’t. On a daily scale, the price action recorded a shooting star candlestick. It represents a failed attempt at a bull run as the wick of the candle is very long compared to the body.
Sawcruhteez, a crypto analyst and trader, noted that the price action on such a short time-frame “does not look good,” suggesting a continuation of bears.
Since the market sentiments were primarily bullish on the move, the shooting star pattern does signal the bears. The trading volume was also not significant enough, and as the candle closed as red, the bull action has been completely negated.
Bears Prevalent All Across the Markets?
Nevertheless, the liquidation of longs on BitMEX was not enough to cause another squeeze. The 24-hour settlement reveals that the market is mainly bearish as we see a more substantial liquidation of short orders than that of long orders.
Crypto Fibonacci, a crypto trader, tweeted,
Squeeze indicator is showing loss of momentum for bears now… Key are to watch is the 78.6 Fib retracement at 6814.
The price of Bitcoin at 4: 15 hours UTC on 5th December 2019 is $7199. On the CME charts (which are slightly skewed as they skip weekend trading), the 50-Day moving Average is coming close to the 200-Day Moving average, another bearish signal with the death cross.
The only hope the bulls have is that the price holds through the sell-off, as they can make a move after bear exhaustion. The previous swing lows and the bearish trendline support are at $6515 and $6200, respectively.
Where do you think the consolidation or reversal will begin? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com