Bitcoin back above 11K
The bitcoin price is way oversold when you look at it from a technical perspective
Is Bitcoin still burning or maybe there is no more blood left to bleed? It is a film which we have seen before; Bitcoin price crash was seen and experienced by traders back in 2013 and also in 2014. Bitcoin is an animal which is known for it’s volatility. When it pops (to the upside), it makes your eyes pop, when it drops it makes your jaws drop.
Bitcoin plunged below 10K yesterday and there is no doubt in saying that the cryptocurrency remains a very risky bet. One should only play with the money that he/she can afford to lose. The massive drop in Bitcoin’s price could easily be blamed on a lot of things and there is a heap of bad news around it’s ecosystem such as; Visa, all of sudden decided to shut down some of the cryptocurrency cards. Regulators decided it is time to flex their muscles and BitConnect announcement to close it’s lending and exchange platform added further fuel to the fire in the crypto space. Although, from the outset, it does appear that it would be difficult to see South Korea ban all the virtual currency exchanges, however, if it becomes the reality, remember it is already baked in the price. Countries like Japan which are favouring this market would benefit far more and it doesn’t necessarily mean that the market would die altogether- at least not that easily
But, we do believe anyone who says that he knows the exact reason for the massive fall would be fooling himself. This is a market of speculators who are looking to become wealthy and we agree with that. However, the argument that the (present) adopted fiat and regulatory system is way behind the curve, is stabbing at the right place.
The bitcoin price is way oversold when you look at it from a technical perspective. Fear of missing out the opportunity among investors is kicking in and this could be the very reason that we are experiencing a dead cat bounce, if not a bottom for the Bitcoin price. The explosive move for the Bitcoin price back in November 24th (which started the stellar rally) could be the area of the support, if not then there is more pain to come. If history serves us correctly, Bitcoin has the ability to fall as much as 80% and that means that the price could drop all the way to $3935 from its peak of 2017.
The advent of Bitcoin futures contracts fuelled the optimism amid investors, however, the expiry of these futures contracts (this week) is the very source of trepidation. To some extent, the evolution of Bitcoin futures stopped the Bitcoin price to make record highs, thanks to a greater number of the bearish bets. Those bearish bets certainly made money this time (during this week’s price meltdown), an opportunity which was not present back in 2013 and 2014. The important price levels which everyone is looking at in the market is your 100 and 200-day moving averages (SMA 100 @ $9943 and SMA 200 @ $6667).
