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The last two weeks have been very difficult for Bitcoin investors (BTC-USD). This is how the cryptocurrency (COIN) fell 43.22% from $ 6.485 to $ 3.63. However, I think the fall will now slow down as I expect cryptocurrency to start to form laterally in the coming days. So, to ascertain the probability of this happening, I will look at the fundamental news concerning the cryptocurrency, while I will analyze the graphs using the technical analysis tools.
Key news:
The Securities and Exchange Commission in the United States:
In my opinion, the US Securities and Exchange Commission is one of the main reasons behind the strong Bitcoin downfall. I say this as the actions of the SEC against the ICOs and cryptographic exchanges, together with its slow progress towards the approval of the new cryptographic tools, have put a strong downward pressure on Bitcoin and on the entire cryptocurrency market . In addition, cryptocurrency market issues have further increased due to the United States Department of Justice which has begun a Tether investigation. This is the suspicion that the DOJ suspects that the prices of the Bitcoins have been manipulated in 2017. This, I think, is bad news for Bitcoin, since any future rally could be perceived as manipulation and cheating.
Cross of death:
I believe that one of the main risks that Bitcoin faces in the coming days is the "Cross of death", when prices fall below the cost of production. If this were to happen on a large scale, then one can not say when and where the fall could end. I say this because it would cause a reduction in the Bitcoin extraction level. Furthermore, this trend has already begun as the Bitcoin hash rate has fallen by more than 12% from the maximum hash level. This was due to the closure of the ASIC miners in areas where the cost of production is already higher than the current Bitcoin price. So, in my opinion, if Bitcoin falls below $ 3,500, I think there will be a substantial decline in the amount of mining capacity allocated to it. Thus, this would trigger a further slide in Bitcoin prices.
Crypto Sunday:
One of the main reasons why I expect that a model of the range of boxes to be filled in Bitcoin is due to the Crypto Sunday initiative launched by Coinmama. This initiative was launched with the aim of accelerating the traditional adoption of cryptocurrencies. Also, on the occasion of the Crypto Sunday, Coinmama offered a special discount on their commissions on selected packages. This proved to be fruitful for Bitcoin as it helped consumers to trade more with less. Furthermore, I believe it is an excellent initiative as it has encouraged more investors to try the cryptocurrency market. This may not be rewarding for the price of Bitcoin in the short term, but I think it will be beneficial for long-term Bitcoin.
Technical analysis:
Daily chart:
The daily chart of the cryptocurrency indicates that, in the coming days, Bitcoin will have a certain price stability due to the formation of a range of side boxes. I say this as the previous candle shows that the bulls have managed to make a comeback. This is due to the formation of a "Bullish Harami" candle model. The psychology of this candle model tells investors that the tide of the market has changed from that in which the bears were in control, to that in which the bulls call the shots. However, the hands of the bull bonded during the next session due to the formation of a "High Wave" candle model. This candle model tells investors that the market is confused. So, because of that, I think there will be box-range training in the next few days, as there is a tug of war between bulls and bears.
On the front of the target price, I expect the upper line of the range range range to be between 127.2% and 161.8% of the Fibonacci resistance levels. The Fibonacci resistance level of 127.2% is at $ 4,321.3, while the Fibonacci resistance level of 161.8% is at $ 4,421.7. Also, for support, I expect the range of boxes to use the Fibonacci support level of 161.8%, which amounts to $ 3,845.2.
Weekly chart:
The weekly chart of the cryptocurrency indicates that the downward race has stalled. I say this because of the formation of a "Doji" candle motif. This psychological model indicates to traders that there is a balance between supply and demand. Furthermore, the candle received further confirmation as it is supported by the 200-day moving average. However, the downside, the 100-day moving average acts as a resistance line. This will ensure that there is no strong bullish rise.
The big picture:
Overall, I'm leaning towards bulls and bears that have a tug of war that will result in Bitcoin exchanges in a box interval model. This is determined by the fact that the technicians support a lateral formation in the cryptocurrency. However, if Bitcoin breaks below the 200-day moving average on the weekly chart, the decline will be extremely rapid. I say this as it will result in the cryptocurrency that enters the range of the Cross of Death mentioned above. This will be detrimental to the price of Bitcoin as it will strengthen bearish strength. However, whatever the way you choose to trade, make sure you use the final arrests, as this contributes to the preservation of capital.
Good luck trading.
Revelation: I / we have no positions in any of the above mentioned titles, and we do not plan to start any positions within the next 72 hours.
I wrote this article alone, and expresses my opinions. I'm not getting any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose actions are mentioned in this article.
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